MASTER 
NEGATIVE 
NO.  94-821 35 


COPYRIGHT  STATEMENT 


The  copyright  law  of  the  United  States  (Title  17,  United  States  Code) 
governs  the  making  of  photocopies  or  other  reproductions  of  copyrighted 
materials  including  foreign  works  under  certain  conditions.  In  addition, 
the  United  States  extends  protection  to  foreign  works  by  means  of 
various  international  conventions,  bilateral  agreements,  and 
proclamations. 

Under  certain  conditions  specified  in  the  law,  libraries  and  archives  are 
authorized  to  furnish  a  photocopy  or  other  reproduction.  One  of  these 
specified  conditions  is  that  the  photocopy  or  reproduction  is  not  to  be 
"used  for  any  purpose  other  than  private  study,  scholarship,  or  research." 
If  a  user  makes  a  request  for,  or  later  uses,  a  photocopy  or  reproduction 
for  purposes  in  excess  of  "fair  use,"  that  user  may  be  liable  for  copyright 
infringement. 

The  Columbia  University  Libraries  reserve  the  right  to  refuse  to  accept  a 
copying  order  if,  in  its  judgement,  fulfillment  of  the  order  would  involve 
violation  of  the  copyright  law. 


Author: 

Cleveland.  Chamber  of 
Commerce. 

Title: 

Employees'  incentive 
plans  in  Cleveland... 

Place: 

[Cleveland] 

Date: 

[1921] 


MASTER   NEGATIVE  « 


COLUMBIA  UNIVERSITY  LIBRARIES 
PRESERVATION  DIVISION 

BIBLIOGRAPHIC  MICROFORM  TARGET 


ORIGINAL  MATERIAL  AS  FILMED  -    EXISTING  BIBLIOGRAPHIC  RECORD 


Cleveland*     Chamber  of  conmeroe*,    Conmdttee.on 
V  J^abor  relations*  .     \ 

Employes*  incentive  plans  in  Cleveland  indus- 
tries*      Report  of  the  Committee  on  labor  rela- 
tions of  the  Cleveland  chamber  of  commeroet 
J Cleveland,  19 21 3 

cover- title,  95  py        23  om« 

.  r.  "■    ■    .  ■  •  - 

Bibliography:  p*  90-91 


o 


MHiiMMHii 


i 


RESTRICTIONS  ON  USE: 


TECHNICAL  MICROFORM  DATA 


FILM  SIZE:      SSaak. 


REDUCTION  RATIO: 


\1--\ 


IMAGE  PLACEMENT:  lA    (m^     IB     IIB 


DATE  FILMED:        U-H-^M 


TRACKING  #  : 


INITIALS: 


fil 


M^M    Ol^lSi 


FILMED  BY  PRESERVATION  RESOURCES.  BETHLEHEM.  PA. 


CJ! 

3 


Q  > 

(Wo 
-•m 

^£ 

i  "^ 

cob: 

4^ 
<J1 

^-< 

OOfSI 

o 


tji 

3 


> 

0,0 

o  m 


CD  O 


0(/>  ^ 


N 


^ 

^^. 


%7^ 


a? 


^. 


^^    '* 


C? 


n^ 


^.  ^X^>  V 


^I*^^ 

-^^ 


o 

3 
3 


^ 


o 
o 

3 
3 


mil? 

1.25 

I.I 

PC 

n 

• 
H 

o 


^  ta  In 


to 


1^ 


00 


o 


ro 


I 


In 


1.0  mm 


1.5  mm 


2.0  mm 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghi|l(lmnopqrstuvwi(y2l2345e7890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyzl234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 

abcdefghijklmnopqrstuvwxyz 

1234567890 


ABCDEFGHIJKLMNOPQRSTUVWXYZ 
abcdefghijklmnopqrstuvwxyz 
2.5  mm  1234567890 


% 


^<^ 


^^ 


r^ 


To 


^o 


^^ 


fp 


^^ 


/% 


■*A 


^c. 


m 

H 
O 

o 

u  m  -0 

>  C  M 

I  TJ  ^ 

0(/)      5 

m 

o 

m 


'^v 


*. 


■#. 


^-'^^. 


^^ 


3 
3 


IS 

Si 
?i 

(A  S 

^^— ♦ 


8 


o 

3 
3 


f? 

in  ^ 

^^ 

M   CO 

c»rNi 
o 


fj'i-. 


Sw'i-' 


sSri;^ 


K»t;. 


ife= 


«»■*- 


'M 


u 


T    d 


% 


v.o'*Sf|->vietccs 


rmmyei 


•XD2G2.       C  S^^ 

Columbta  lHnibers(ttp    f 

intljeCttpof^togorb 


LIBRARY 


School  of  Business 


f 


m 


Employes'  Incentive  Plans 
in  Cleveland  Industries 


Report  of  the 

Committee  on  Labor  Relations  of 

The  Cleveland  Chamber  of  Commerce 


Approved  by  the  Board  of  Directors 
January  12,  1921 


^y..#u^.  if^^ 


'# 


LABOR  RELATIONS  REPORTS  PREVIOUSLY  PUBLISHED, 

1.  Safety  Devices  and  Factory  Organizations  for  the  Pre- 

vention of  Industrial  Accidents  (1) 1913 

2.  Violence  in  Labor  Disputes  (2) 1915 

3.  Violence  in  Labor  Disputes,  Second  Report  (2) 1916 

4.  Industrial  Profit-sharing  and  Welfare  Work  (1) 1916 

5.  Two   Letters    (Correspondence    Between   County    Pros- 

ecutor and  Committee  on  Labor  Disputes)   (2) 1916 

6.  Violence  in  Labor  Disputes,  Third  Report  (2) 1917 

7.  Substitution  of  Woman  for  Man  Power  in  Industry  (1) 1918 

8.  Is  the  ''Strike  Guard''  Ordinance  Valid? 1919 

9.  Method  of  Collecting  Non-resident  Alien  Income  Tax 1919 

10.    Labor  Relations  in  Cleveland,  a  Declaration  of  Principles 

Establishing  a  Proper  Basis  Therefor 1920 

IL    The  Plumbers'  Strike 1920 

12.  Violence  in  Labor  Disputes,  Fourth  Report 1920 

13.  The  Causes  of  High  Building  Costs  in  Cleveland  (3)  __  1920 

14.  An  Argument  for  Local  Boards  of  Adjustment  in  Rail- 

road Labor  Disputes  (4) 1920 

(1)  By  the  Committee  on  Industrial  Welfare,  succeeded  by 
the  Committee  on  Labor  Relations  in  1918. 

(2)  By  the  Committee  on  Labor  Disputes,  succeeded  by  the 
Committee  on  Labor  Relations  in  1918. 

(3)  By  a  Special  Committee,  composed  of  certain  members 
of  the  Committees  on  Industrial  Development  and  Labor  Relations. 

(4)  By  a  Special  Committee,  composed  of  certain  members 
of  the  Committees  on  Transportation  and  Labor  Relations. 


EMPLOYES'  INCENTIVE  PLANS  IN  CLEVELAND 

INDUSTRIES 

Introduction 

*' Where  possible,  incentives  and  opportunities  should  he  of- 
fered to  employes  to  increase  their  earning  capacity. '* 

This  statement  appears  in  the  Declaration  of  Principles  of  The 
Cleveland  Chamber  of  Commerce,  adopted  in  April,  1920,  as  the 
Chamber's  labor  relations  plan.  A  wide  range  of  such  incentives 
and  opportunities  is  found  locally,  including: 

(a)  Individual  incentives — wage  payment  methods  contain- 
ing incentive  features  whereby  individual  ability  and  ambition 
are  stimulated  and  rewarded. 

(b)  Group  incentives — plans  for  employes'  profit  sharing, 
bonuses  and  stock  ownership. 

This  report'  deals  principally  with  Cleveland  plans  for  em- 
ployes' profit  sharing,  bonuses  and  stock  ownership.  Such  plans 
may  be  classified  as  group  incentive  plans.  However,  in  the  light 
of  its  study  of  the  subject,  the  committee  recognizes  as  fundament- 
ally correct  the  principle  of  offering  employes  individual  incentives, 
based  on  individual  effort  and  accomplishment.  Examples  of 
plans  illustrating  this  principle  are  therefore  included  in  this  re- 
port. 

The  purpose  of  the  committee  in  making  this  study  was  two- 
fold :  first,  to  ascertain  the  policies  underlying  local  profit  sharing, 
bonus  and  stock  ownership  plans  and  the  methods  employed,  and 
second,  to  determine  what  results  are  being  obtained. 

Nearly  600  firms  in  the  Cleveland  district  were  recently  inter- 
viewed through  questionnaires  and  visits.  Approximately  19% 
reported  various  plans  under  the  following  classifications,  here- 
after defined: 

Profit  sharing  plans, 
Limited  profit  sharing  plans. 
Bonus  plans. 
Stock  sales  plans. 

Basic  Principles  of  Incentive  Plans 

As  a  result  of  its  study,  the  committee  has  formulated  several 
basic  principles  which,  in  its  opinion,  should  underlie  incentive 
plans  of  the  types  under  consideration  and  without  which  such 
plans  are  unlikely  to  prove  effective : 

1.  An  incentive  plan  should  have  as  its  fundamental  pur- 
pose the  increasing  of  the  value  of  employes'  services  both  to 
themselves  and  their  employer. 

2.  Such  a  plan  should  serve  to  promote  confidence  and 
understanding  between  the  employer  and  employes. 

3.  To  that  end,  the  benefits  to  employes  should  be  sub- 
stantial and  in  addition  to  the  current  rate  of  wages. 


I  Employes*  Incentive  Plans 

4.  The  plan  should  not  represent  paternalism  or  philan- 
thropy on  the  employer's  part. 

5  The  participants  in  the  plan  should  be  informed  as  to 
the  factors  affecting  the  payment  and  amount  of  the  incentive. 

6.  They  should,  preferably,  be  represented  in  the  admin- 
istration of  the  plan. 

7  The  plan  should  be  designed  to  meet  the  needs  of  each 
enterprise  and  accomplish  the  worthy  objects  of  the  employer. 

8  The  success  of  any  plan  is  particularly  dependent 
upon  the  effectiveness  of  its  management.  Any  plan  no  mat- 
t^  how  admirable  may  be  its  features,  will  fail  unless  it  is 
properly  managed. 

Intermediate  Objects  of  Incentive  Plans 
'As  stated  above,  the  fundamental  purpose  of  an  incentive  plan 
should  be  to  increase  the  value,  both  to  the  employer  and  employes 
of  the  employes'  services.  Many  intermediate  objects  of  incentive 
plans  are  iUustrated  throughout  this  report.  They  include :  in- 
ceased  productive  efficiency,  reduced  labor  turnover,  prompt  and 
regular  attendance,  loyalty,  interest  in  work,  thrift  and  self -devel- 
omnent.  Wherever,  under  existing  wage  systems,  these  factors  are 
not  given  due  weight  it  is  the  proper  function  of  incentive  plans 
to  remedy  this  situation. 

Definitions 

A  Cleveland  individual  incentive  plans  may  be  defined  as 
offering  incentives  to  individual  employes  based  on  their  accom- 
plishment, individuaUy  or  in  small  groups,  measured  by  prede- 
termined  standards  of  production. 

B.  Cleveland  group  incentive  plans  may  be  classified  and  de- 
fined as  follows: 

1  profit  sharing  plan,  a  profit  sharing  plan  contem- 
plates  an  agreement  between  an  employer  and  his  employes 
whereby  the  latter  receive,  in  addition  to  wages,  a  prede- 
termined proportion  of  the  profits. 

2  limited  profit  sharing  plan.  In  a  limited  profit 
sharing  plan,  it  is  provided  that  certain  employes  or  classy 
of  employes  will  receive,  in  addition  to  wages,  a  predetermined 
proportion  of  the  profits. 

3  bonus  plan,  a  bonus  plan  provides  for  the  distribu- 
tion to  employes  of  sums  in  addition  to  wages,  which  sums  are 
not  based  upon  a  predetermined  percentage  of  the  profits  but, 
in  general,  are  given  as  rewards. 

4  stock  sales  plan,  a  stock  sales  plan  is  provided  by 
certain  corporations  whereby  the  purchase  of  company  stock 
by  employes  is  facilitated. 


Introduction  5 

Arrangement  of  Data 

Many  Cleveland  group  incentive  plans  are  hereafter  described 
in  detail  under  the  four  main  classifications  of  profit  sharing,  lim- 
ited profit  sharing,  bonus,  and  stock  selling  plans,  accompanied  by 
summaries  for  each  classification. 

Certain  individual  incentive  plans  have  been  selected  to  illus- 
trate the  principles  underlying  this  class  of  employes'  incentives. 

The  Chamber  of  Commerce  has  on  file  supplementary  data 
which  are  available  to  employers,  employes  and  students  of  indus- 
trial relations. 


Edgar  E.  Adams 
H.  B.  Bole 
N.  J.  Clarke 
J.  0.  Eaton 
Charles  E.  Denney 
Richard  A.  Feiss 
R.  J.  Frackleton 
Alfred  Fritzsche 
Hugh  FuUerton 
F.  M.  Gregg 
S.  H.  HaUe 
A.  T.  Hills 
C.  W.  Hotchkiss 


John  G.  Jennings 
Crispin  Oglebay 
H.  C.  Osborn 
Melvin  Pattison 
Robert  E.  Power 
Alexander  Printz 
H.  A.  Rock 
F.  W.  Smith 
W.  B.  Stewart 
Stephen  W.  Tener 
W.  H.  Thompson 
E.  G.  Tillotson 
Whiting  Williams 


COMMITTEE  ON  LABOR  RELATIONS, 

By  W.  B.  McAUister, 

Chairman. 


December  1,  1920. 


V 


CLEVELAND  INDIVIDUAL  INCENTIVE  PLANS 


TYPES 

(1)  Aluminum   Manufactures,   Inc. 

(2)  The  Columbia  Axle  Co. 

(3)  The  Printz-Biederman  Co. 

(4)  The  Wellman-Seaver-Morgan  Co. 

(5)  The  White  Sewing  Machine  Co. 

(6)  The  Van  Dom  Iron  Works  Co. 

SUMMAEY 


Cleveland  Individual  Incentive  Plans 


ALUMINUM  MANUFACTURES,  INC. 

2800  Harvard  Avenue 


PRINCIPAL   business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


Manufacture  of  aluminum  castings. 
250-275  (Cleveland  Plants) 
1912. 


CHARACTER  OP  THE  WORK: 

The  company  produces  aluminum  eastings  of  all  kinds.  The  work  is 
largely  jobbing  or  semi-jobbing.  The  automotive  industry  takes  a  consider- 
able portion  of  the  company's  product. 

PRODUCTION   STANDARDS: 

Standards  are  set  by  time  study  for  jobs  operating  on  the  bonus  plan. 

They  are  guaranteed  against  reduction  for  any  reason  except  change 
of  method.  Owing  to  the  changing  nature  of  the  industry,  the  standards  are 
rarely  in  force  for  more  than  two  years. 

The  workmen  may  protest  standards  believed  to  be  unfair.  Such  stan- 
dards are  either  checked  by  time  study  or  an  effort  is  made  to  convince  the 
workmen  of  their  fairness. 

The  nature  of  the  work  is  such  that  a  gang  or  group  of  employes  may 
work  on  an  operation.  In  this  case,  the  standard  is  set  for  the  production  of 
the  group. 

INSTRUCTION : 

The  instruction  of  new  employes  is  not  an  important  problem.  Crafts- 
men such  as  molders  are  expected  to  be  skilled  in  their  craft. 

Such  instruction,  as  is  necessary,  is  given  by  the  foreman,  superintendent 
and  others.    Much  help  is  given  by  the  time  study  analysis. 

RETAINER   PAY: 

The  employe  receives  wages,  at  his  hourly  rate,  until  such  time  as  he  is 
able  to  earn  a  bonus. 


PAYMENT  OF   INCENTIVES: 

The  employes  are  classified  according  to  their  skill  and  the  character  of 
their  work.  A  standard  bonus,  which  may  be  earned  by  accomplishing  100% 
of  a  standard  task,  is  set  for  each  class.  A  differential  bonus  based  on  the 
standard  bonus  is  given  for  producing  80%  or  more  of  the  standard  task. 
The  bonus  is  computed  as  follows:  It  is  assumed  that  the  employe  would 
receive  a  bonus,  equal  to  10%  of  the  standard  bonus,  if  he  produced  50%  of 
the  standard  task.  The  bonus  increases  according  to  this  relation  as  the  pro- 
duction approaches  100%  of  the  standard  task.  In  order  to  increase  the  in- 
centive value  of  the  plan,  bonus  is  not  usually  paid  until  the  employes'  produc- 
tion is  at  least  80%  of  the  standard.  There  are  instances,  however,  when  bonus 
is  paid  for  60  or  70%  accomplishment.  The  incentive,  to  exercise  great  dili- 
gence and  acquire  skill,  is  much  greater  if  no  bonus  is  given  until  the  employe 
produces  a  substantial  amount  than  it  would  be  if  a  small  bonus  were  given 
for  accomplishing  50%  of  the  standard  task. 

The  relation,  which  governs  the  amount  of  bonus  which  may  be  earned, 
may  be  expressed  mathematically  as  follows: 

b  =  (9/5x  —  .80)   B 

Where  *'b**  is  the  bonus  earned,  ''x*'  is  the  ratio  of  the  amount  actually 
produced  to  the  standard  task  and  ^'B''  is  the  standard  bonus  given  for 
accomplishing  100%  of  the  standard  task. 

The  standard  bonus  has  no  direct  connection  with  the  employes'  base  rate. 
The  company  pays  the  current  rate  for  labor.  The  basic  hourly  wage  rates 
for  a  given  class  of  labor  may  vary  from  time  to  time  in  accordance  with  the 


10 


: 


Employes*  Incentive  Plans 


Cleveland  Individual  Incentive  Plans 


11 


law  of  supply  and  demand  but  the  standard  bonus  for  that  class  remains 
unchanged  so  long  as  existing  jobs  continue.  However,  it  may  be  reduced  on 
new  work. 

All  bonus  payments  are  in  addition  to  the  employes'  basic  hourly  wages. 

In  order  to  enable  the  workman  to  compute  his  earnings  easily,  a  bonus 
schedule  appears  on  the  bonus  card  for  each  operation. 

GUARANTEE  OF  EABNINGS: 

It  is  guaranteed  that  the  employes  wiU  receive  at  least  their  hourly 
wages. 

IDLE  time: 

Idle  time,  due  to  causes  over  which  the  employe  has  no  control,  does  not 
affect  his  ability  to  earn  a  bonus.  The  employe  receives  payment  for  such 
idle  time  at  his  hourly  rate  but  his  efficiency  is  computed  only  on  the  basis 
of  his  working  time. 

MAINTENANCE  OF   QUALITY: 

The  method  has  not  increased  the  amount  of  scrap  or  the  cost  of  inspec- 
tion. The  employes  understand  that  no  bonus  is  paid  for  work  spoiled  be- 
cause of  faulty  workmanship.  It  is  stated  that  they  are  debited  for  all  scrap 
for  which  they  are  responsible. 

EMPLOYES   PRODUCTION   RECORDS: 

The  employe's  job  ticket  is  the  original  record  of  his  production  and 
is  the  authority  for  bonus  payments. 

A  list  of  the  hours  worked  on  bonus  and  the  percentage  of  efficiency  is 
made  daily. 

RESULTS   REPORTED  BY  THE  EMPLOYER: 

Under  this  system,  the  employes  wages  are  30%  to  60%  greater  than  their 
day  wages.  On  271  operations,  production  increased  86.8%,  and  costs  were 
reduced  31%. 

While  the  employes  were  suspicious  of  the  methods  at  first,  the  more 
ambitious  men  now  like  it 


THE  COLUMBIA  AXLE  CO. 

850  E.  72nd  Street 


PRINCIPAL   business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  established  IN: 


Manufacture  of  automobile  axles. 

700. 

1916. 


CHARACTER  OF  THE  WORK: 

The  company  manufactures  many  styles  of  automobile  axles.  The  work 
is  sufficiently  repetitive  to  permit  the  determination  of  accurate  standards* 

PRODUCTION  STANDARDS: 

A  production  standard  is  determined  for  each  operation  by  time  study. 
As  far  as  possible,  the  study  is  taken  on  a  workman  of  average  ability. 

All  studies  are  taken  in  the  workman's  presence  and  every  effort  is  made 
to  convince  him  of  the  fairness  of  the  methods  and  the  correctness  of  the 
standards. 

In  determining  standards,  due  allowance  is  made  for  set  up  time,  fatigue, 
time  required  to  change  work  ticket  and  other  similar  factors. 

The  operator  may  protest  production  standards  which  he  considers  un- 
fair. At  his  request,  such  standards  are  checked  by  further  time  study  or 
past  records. 


If  it  is  necessary  to  set  a  temporary  standard,  the  workman's  time  card 
is  plainly  stamped  "Temporary."     Such  standards  are  usually  set  for  one 

month. 

The  piece  rate  method  of  wage  payment  has  been  applied  to  all  stand- 
ardized work  which  includes  approximately  94%  of  the  direct  and  40%  of  the 
indirect  labor. 

INSTRUCTION : 

The  instruction  of  the  employes  rests  with  the  foreman.  No  instruction 
cards  are  issued  to  the  workman,  except  the  blueprint  of  the  piece  on  which 
he  is  working. 

If  the  employe  consistently  fails  to  produce  the  standard  quantity,  and 
the  standard  has  been  previously  proven  correct,  his  performance  may 
be  checked  by  time  study.  Further  instruction  regarding  the  performance  of 
those  elements  of  the  operation  on  which  the  employe  is  slow,  is  then  given. 
If  the  employe  is  constitutionally  unfit  to  satisfactorily  perform  the  operation, 
he  is  first  transferred  to  other  work.  If  unfit  after  second  trial,  he  is  re- 
leased. 

RETAINER   PAY: 

New  employes  or  employes  transferred  to  new  operations  may  work  one 
week  at  their  basic  hourly  rate.  After  this  time,  they  are  expected  to  accom- 
plish at  least  the  standard  production. 

PAYMENT  OF  INCENTIVES: 

On  the  basis  of  the  production  standard,  a  piece  rate  is  so  set  for  each 
operation  as  to  enable  the  employe  to  earn  from  30%  to  70%  more  than  his 
basic  hourly  wages.  The  base  wage  is  stated  to  be  the  *  *  low  going-wage ' '  for 
the  required  class  of  labor.     The  piece  rate  then  is: 

P.  E.  =  Basic  Hourly  Wage 

.  X  F 

Standard  Hourly  Production 

The  factor  F  varies  from  1.3-1.7. 

The  employes  are  paid  their  basic  hourly  wages  plus  the  excess  of  their 
piece  rate  earnings  over  their  basic  wages. 

The  piece  rates  are  guaranteed  against  any  cut  until  the  following  Jan- 
uary, unless  the  method  of  operation  is  changed. 

In  the  past,  the  average  earnings  of  piece  rate  workers  have  been  from 
40  to  90%  greater  than  their  base  wages. 

GUARANTEE  OF  EARNINGS: 

It  is  guaranteed  that  the  employes  will  be  paid  at  least  their  basic  hourly 
wages. 

IDLE  TIME: 

In  case  of  idleness  due  to  machine  break-downs  or  other  causes  beyond 
the  employe's  control,  he  is  transferred  to  a  new  operation  or  paid  for  the 
time  involved  at  his  base  rate. 

MAINTENANCE  OF  QUALITY: 

The  cost  of  inspection  is  less  than  under  the  day  work  method.  The  pro- 
duction incentive  and  the  fact  that  no  payment  is  made  for  spoiled  work 
produce  a  more  careful  and  skillful  workman. 

Under  this  method,  the  first  piece  produced  is  inspected  on  each  opera- 
tion and  other  pieces  checked  from  time  to  time.  All  pieces  receive  a  final 
inspection. 

EMPLOYES   PRODUCTION  RECORDS: 

The  operation  tickets  called  a  ** Piece  Work  Productive  Ticket"  furnish 
a  record  of  each  employe's  production. 


I' 


,  II I 


12 


Employes'  Incentive  Plans 


BBSULTS  REPORTED  BY  THE  EMPLOYER: 

The  eflSciency  and  morale  of  the  men  have  been  greatly  increased  by 
this  method  of  wage  payment     They  are  apparently  satisfied  with  its  fair- 


During  the  years  from  1914  to  1920,  the  earnings  of  the  employes  increased 
185-190%.  Unit  labor  costs  increased  less  than  10%.  So  far  during  1920, 
the  productive  hours  per  unit  have  been  lowered  about  20%. 

The  plan  was  eminently  successful  for  several  years  prior  to  the  estab- 
lishment of  a  Workman's  Committee  which  has  been  in  effect  approximately 
one  year. 


THE  PRINTZ-BIEDERMAN  COMPANY 

W.  6th  and  Lakeside  Avenub 


PRINCIPAL   BUSINESS: 

NUMBER  OP  PEOPLE  EMPLOYED: 

FLAN  WAS  ESTABLISHED  IN: 


Manufacture  of  cloaks  and  suits. 
800. 

Bonus  Plan — 1st  one,  Fall  1917:  Guaranteed 
Pay,  Fall  1918. 


There  are  certain  features  common  to  the  following  wage  incentive  plans. 
1.    Setting  of  the  standard  time  based  on  scientific  time  studies. 
Guarantee  against  cutting  of  the  standard  time. 
Payment  for  idle  time  and  day  work. 
Production  bonus  for  attaining  standard  production. 
In  addition  to  these  features,  a  Service  Bonus  is  paid. 


2. 
3. 


CHARACTER  OF  THE  WORK: 

The  work  is  subject  to  the  seasonal  fluctuations  in  the  volume  of  businessi, 
and  to  the  changing  styles.  However,  many  of  the  fundamental  operations 
entering  into  the  manufacture  of  cloaks  and  suits,  are  the  same  regardless  of 
■tyle. 

PBODUcnoN  standards: 

The  standard  time  is  determined  for  each  operation  by  time  study  of  the 
elements,  comprising  the  operation.  These  elements  are  recorded  and  care- 
fully analyzed  to  determine  the  best  method  of  doing  the  work,  the  time 
required  and  the  nature,  extent  and  cause  of  any  variation  in  time.  From 
this  analysis,  the  standard  times  are  applied  by  arranging  the  various  related 
elements  in  the  proper  sequence.  In  this  way,  standards  on  each  new  style 
are  obtained  by  determining  what  must  be  done,  and  grouping  the  elements 
accordingly. 

No  standard  is  accepted  as  final,  until  it  has  been  explained  satisfactorily 
to  the  conmiittee  of  the  employes.  After  this,  if  an  employe  feels  that  the 
standard  is  unfair,  it  is  again  taken  up,  and  adjusted,  if  necessary. 

Employes  are  guaranteed  against  a  cut  in  the  standard,  unless  new 
methods  and  improvements  are  introduced. 

INSTRUCTION : 

Instructions  are  written  for  each  operation,  based  on  the  information 
obtained  from  the  time  standards.  These  instructions  are  used  by  the  foreman 
as  a  basis  for  instructing  the  employes. 

XBTAINXB  PAY: 

Employes  working  under  a  guaranteed  pay  system,  who  are  obliged  to 
work  on  an  operation  of  a  lower  class,  are  given  an  hourly  retainer  to  cover 
the  difference  between  the  base  rate  of  the  two  operations. 


Cleveland  Individtial  Incentive  Plans 


13 


When  employes  are  asked  to  do  work  of  the  same  or  higher  class,  with 
which  they  are  not  familiar,  they  are  paid  temporary  retainers  suflficient  to 
prevent  any  loss  in  earnings.     For  example:    Under  the  guaranteed  pay  sys- 
tem, the  following  retainer  is  most  frequently  used: 
The  first      nine  hours — an  hourly  retainer  of  70%  of  the  standard  hourly  rate 
The  second  nine  hours— an  hourly  retainer  of  40%  of  the  standard  hourly  rate 
The  third    nine  hours — an  hourly  retainer  of  10%  of  the  standard  hourly  rate 

PAYMENT  OP  INCENTIVES: 

Tosh  and  Bonus  Plan  in  the  Cutting  Department 
The   following   plan   is   considered  best    suited   to   this    department,   be- 
cause of  the  high  uniform  skill  of  the  men  and  the  importance  of  maintaining 
quality  in  this  work. 

1.  Jobs  are  divided  into  classes  and  an  hourly  rate  is  set  for  each 

class.  -    . 

2.  The  standard  time  is  set,  from  the  classified  data,  for  each  in- 
dividual job.  If  the  work  is  done  in  standard  time  or  less,  a  produe- 
tion  bonus  of  25%  of  the  standard  time  is  given.  This  tends  to  keep 
the  efficiency  at  a  Httle  above  100%,  as  no  bonus  is  given  for  efl&cieney 
less  than  100%,  and  it  isn't  worth  while  to  speed  up  unduly.  Thus  quality 
is  protected. 

Tasic  and  Bonus  Plan  in  the  Operating  Departments 
The  following  plan  was  established  in  1918,  in  the  tailoring  departments, 
as  a  temporary  measure  to  increase  production,  and  afford  the  employes  an 
opportunity  to  earn  more  money.     The  time  standards  were  set  only  tem- 
porarily at  that  time. 


Accomplishment 

1.  130%  of  standard  time 

2.  115%  of  standard  time 

3.  100%  of  standard  time 

4.  85%   of  standard  time 


Bonus  Beceived 

5    ^  per  hour 

7    ^  per  hour 

10    ^  per  hour 

13.1^  per  hour 


Guaranteed  Pay  System 
The  following  system  is  being  extended  throughout  the  tailoring  depart- 
ments, as  fast  as  the  final  standard  times  are  completed. 

1.  A  TniniTniiTn  hourly  rate  is  set  f oj  each  class  of  operation. 

2.  A  standard  hourly  rate  is  set  which  is  25%  higher  than  the 
minimum. 

3.  The  piece  rate  for  an  operation  is  set  by  multiplying  the  stand- 
ard time  by  the  standard  hourly  rate. 

4.  This  piece  rate  is  the  basis  of  payment  while  there  is  work  avail- 
able. . 

5.  For  an  efficiency  of  100%  or  more  on  all  3obs  completed  during 
the  day,  a  production  bonus  of  6  cents  per  hour  is  paid  in  addition  to 
piece  work  earnings. 

6.  Employes  are  given  50  cents  a  day  for  perfect  attendance. 

GUARANTEE  OF  EARNINGS: 

Employes,  operating  under  the  task  and  bonus  plan,  are  paid  by  the  hour 
when  there  is  no  work  available.  ^  ^ 

Under  the  guaranteed  pay  system,  the  employe  is  paid  at  the  mimmum 
hourly  rate  for  work  which  has  no  production  standards. 

IDLE  TIME: 

Employes  are  paid  for  idle  time  due  to  causes  beyond  their  eontroL 
Under  the  guaranteed  pay  system,  they  are  paid  at  their  minimum  hourly 
rate. 


14 


Employes'  Incentive  Plans 


Cleveland  Individual  Incentive  Plana 


15 


>l 


(i- 


1 


MAINTENANCE  OP  QUAIiITY: 

The  correction  of  faulty  workmanship  must  be  made  by  the  employe  on 
Ms  own  time. 

EMPLOYES  PRODUCTION  RECORDS: 

Daily  reports,  showing  the  production  of  each  employe  compared  to  the 
standard  production,  are  received  by  the  management,  enabling  them  to  investi- 
gate low  efficiencies  to  determine  whether  the  employe  receives  the  right  instruc- 
tions and  is  fitted  for  the  job,  and  high  efficiencies  to  insure  the  maintenance 
of  the  proper  standards  of  quality. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  ability  to  measure  the  output  of  the  individual  has  helped  to  in- 
crease the  production  of  the  plant,  in  some  departments  as  much  as  50%. 
By  taking  upon  itself  the  responsibility  of  idle  time,  the  management  has 
instilled  greater  confidence  in  the  employes  and  has  broken  down  one  of  the 
objections  to  the  Piece  Kate  System. 

By  checking  up  the  individual  efficiency,  the  management  has  been  better 
able  to  place  the  employes  in  positions  for  which  they  are  best  fitted  and  has 
eliminated  from  the  organization  those  who  were  unwilling  to  produce. 

By  standardizing  the  work  and  finding  the  best  way  of  doing  it,  foUowed 
by  more  definite  instructions,  a  better  quality  has  been  maintained. 


THE.  WELLBIAN-SEAVER-MORGAN  CO. 

7000  Central  Avenue 


PRINCIPAL   business: 

number  OP  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


Manufacture  of  heavy  machinery. 

600. 

1917. 


CHARACTER  OP  THE  WORK: 

The  company  manufactures,  to  order,  a  varied  line  of  heavy  machinery. 
The  characteristics  of  the  work  are  to  a  large  extent  those  of  a  jobbing  busi- 


ness. 


PRODUCTION   STANDARDS; 


Owing  to  the  fact  that  the  work  is  large,  the  number  of  machines  on  an 
order  is  usually  small  and  the  work  is  not  to  any  extent  repetitive,  the  com- 
pany does  not  consider  it  practical  to  set  standards  by  time  study  except  in 
special  cases.  In  general,  the  production  standards  are  the  estimates  of  ex- 
pert mechanics. 

A  production  standard  once  set  is  not  reduced  unless  there  is  a  change 
of  method.  The  company  believes  that  this  policy  is  fundamental  to  the  suc- 
cess of  its  plan. 

If  an  employe  believes  that  a  standard  is  incorrect,  he  may  protest.  An 
investigation  of  his  method  of  performing  the  operation  is  then  made.  If  the 
employe  can  prove  that  the  standard  is  wrong,  it  is  properly  adjusted.  It  is 
recognized  that  much  of  the  plan's  effectiveness  depends  upon  the  receiving 
of  a  substantial  bonus  for  exceptional  production. 


INSTRUCTION: 

The  work  requires  highly  skilled  mechanics, 
directions,  no  instruction  is  necessary. 


Excepting  the  foreman's 


RETAINER  PAY: 

Eetainer  pay  is  not  necessary.     The  workmen  must  be  able  to  set  up 
their  work.    They  are  paid  at  their  hourly  rate  for  such  work. 


PAYMENT  OP   INCENTIVES: 

The  employe  is  paid,  in  addition  to  day  wages,  50%  of  the  value,  at  his 

hourlv  wage  rate,  of  the  standard  time  saved.  ,      ,  ^^  x 

Employes  are  hired  at  a  basic  hourly  wage  which  is  at  least  the  current 

market  rate. 

GUARANTEE  OP  EARNINGS: 

It  is  guaranteed  that  the  employes  will  earn  at  least  their  basic  hourly 
wages. 

IDLE  time: 

Idle  time,  due  to  causes  other  than  the  employe's  negligence,  does  not 
affect  the  earning  of  a  bonus.  The  employe  is  paid  for  such  time  at  his 
hourly  rate. 

MAINTENANCE  OP  QUALITY: 

The  method  has  not  affected  the  quaUty  of  the  work  nor  increased  inspec- 
tion costs.  • 

EMPLOYES  PRODUCTION  RECORDS: 

Eecords  are  kept  which  give  a  check  on  the  productivity  of  each  work- 
man. 

RESULTS   REPORTED  BY  THE  EMPLOYER: 

It  is  estimated  that  this  method  has  reduced  the  required  operating  time 
on  the  average  job  20%  to  50%  and  that  the  earnings  of  bonus  workers  are 

20%  to  70%  above  their  day  wages.  .u  :,       ^     **  v  ♦!.«+  +1,^;, 

The  more  ambitious  workers  like  the  method  and  often  ask  that  their 

work  be  put  on  bonus. 


THE  WHITE  SEWING  MACHINE  CO. 

E.  79th  and  St.  Clair  Avenue 


PRINCIPAL   BUSINESS: 

NUMBER  OP  PEOPLE  EMPLOYED: 

PLAN   WAS   ESTABLISHED   IN: 


Manufacture  of  sewing  machines. 

500-750. 

1918. 


CHARACTER  OP  THE  WORK: 

The  product  is  well  standardized,  repetitive  and  production  standards  can 
be  easily  determined. 

PRODUCTION  standards: 

Production  standards  are  determined  for  the  various  operations  by  time 
study  of  their  elementary  operations.  The  standard  performance  time  is  ex- 
pressed in  points.  Each  point  is  equivalent  to  one  minute.  For  a  job  whose 
standard  performance  time  is  30  minutes,  the  equivalent  would  be  30  points. 

The  production  standards  are  guaranteed  against  reduction,  except  m 
case  of  change  of  process.  It  is  sometimes  necessary  to  set  temporary  stand- 
ards for  new  models  but  such  standards  are  clearly  marked  temporary  and 

are  not  officially  posted.  ^  .        «    ,     ^     -,     j     ^  ^ 

Employes  may  protest  standards  considered  unfair.     Such  standards  are 

investigated  and  changed  if  found  incorrect. 

INSTRUCTION : 

The  instruction  of  employes,  regarding  the  performance  of  operations,  is 
given  by  the  job  foreman  or  the  machine  setter. 


16 


Employes*  Incentive  Plans 


BKTAINKE  PAY: 

Employes,  learning  new  operations,  or  new  employes  receive  hourly  waeea 
until  they  are  proficient.  J       & 

PAYMENT  OP  INCENTIVES: 

Each  employe  is  hired  at  a  basic  hourly  wage  rate,  which  corresponds  to 
the  ^rrent  market  wage  for  the  class  of  labor  required. 

The  value  of  the  production  points  varies  with  each  employe  and  is  equal 
to  hia  basic  hourly  rate  divided  by  60.  ^ 

As  an  employe  completes  a  job,  he  is  credited  with  the  equivalent  num- 
ber of  points.  His  operation  tickets  record  the  number  of  points  accumu- 
lated to  his  credit  during  a  work  period.  In  addition  to  his  day  wages,  the 
employe  receives  75%  of  the  value  of  all  points  credited  in  excess  of  the 
number  of  points,  which  is  standard  for  the  work  period.  The  remaining  25% 
w  divided  among  supervisory  employes  such  as  job  setters  and  job  foremen. 
For  an  eight  hour  day,  the  standard  number  of  points  is  480.  Expressed 
mathematically  the  employes  earnings  are: 

Earnings  =  (H  X  »)  +  .75  (P  —  S)  R/60 
=  (H  X  R)  4-  -0125  (P  —  S)  B 
4.  ^of/I?"  ^  *^®  number  of  hours  worked,  **R'Mhe  basic  hourly  wage 
ff?/,  .  ^1.  number  of  points  accumulated  during  the  work  period  and 

»     is  the  standard  number  of  points  for  the  work  period. 

As  the  production  standard  is  higher  than  the  average  production  ob- 
tained under  the  day  work  system,  the  company  saves  the  day  work  labor 
cost  of  any  difference  in  production  between  the  day  work  average  and  the 
the  standard,  and  all  of  the  overhead  charge  on  any  increased  production. 

If  an  employe  has  averaged  60  points  or  more  per  hour  during  any  four 
guccessive  days,  he  is  thereafter  credited  with  70  points  for  each  hour  worked 
on  jobs  which  have  no  production  standards. 

GUARANTEE  OF  EARNINGS: 

It  is  guaranteed  that  the  employes  wiU  not  earn  less  than  their  basic 
hourly  rate.  Those  who  are  habitually  unable  to  earn  a  premium,  are  trans- 
ferred to  other  work. 

IDLE  time: 

Employes,  who  have  averaged  60  points  or  more  per  hour  during  any  four 
successive  days,  are  credited  with  70  points  per  hour  for  all  idle  time  not 
due  to  their  negligence. 

maintenance  op  quality: 

The  company  believes  that  the  operation  of  this  method  has  not  tended 
to  reduce  the  quality  of  the  product. 

employes  production  records: 

The  time  study  department  is  notified  daily  concerning  operations  whoso 
■tandards  are  not  being  met.     Such  standards  are  immediately  investigated. 

BBSULTS   REPORTED  BY  THE  EMPLOYER: 

The  older  employes  objected  to  the  system  at  first.  AU  employes  are 
now  apparently  well  satisfied. 

There  has  been  a  very  satisfactory  increase  in  production. 

Note:  The  Brown  Hoisting  Machinery  Company  and  The  Hydraulic 
Pressed  Steel  Ck)mpany  are  installing  similar  plans. 


ill; 


Cleveland  Individual  Incentive  Plans 


17 


THE  VAN  DORN  IRON  WORKS  CO. 

2685  E.  79th  Street 


principal  business: 


NUMBER  op  people  EMPLOYED: 
PLAN   WAS   established  IN: 


Manufacture  of  steel  office  furniture,  steel 
lockers,  shelving,  automobile  frames, 
joist  hangers  and  miscellaneous  con- 
tract work. 

1150. 

March,  1919. 


character  of  the  WORK: 

The  office  furniture  line  is  standard  and  quite  repetitive.  The  automo- 
bile work  IS  largely  repetitive  but  it  is  subject  to  the  constantly  cSngrg 
conditions  m  the  automotive  mdustry.  The  contract  work  presents  the  usual 
difficulties  to  the  determination  of  production  standards  encountered  S 
non-repetitive  work  standard  machine  shop  operations,  shearing,  notch3 
en^e^%         ""^^  ""^^  assembling,  riveting,  spot  Welding,  |is  weldSf,' 

PRODUCTION   STANDARDS: 

The  production  standard  for  an  operation  is  determined  by  time  studv 
of  Its  elements.  The  standard  time  includes  a  suitable  alloZnc!  fTUS 
changing  time  cards,  setting  up  the  machine  and  similar  factors 

It  IS  guaranteed  that  the  standard  time  per  unit  will  not  be  reduced  un- 
less the  method  of  operation  is  changed.  xeuucea  un 

The  employes  have  the  privilege  of  protesting  against  any  standards 
which  they  consider  unfair.  Such  standards  are  investiglted  and  if  n^es^r? 
checked  by  further  time  study.  ^  '       necessary, 

INSTRUCTION : 

The  instruction  of  employes  rests  with  the  foreman 

A  rate  sheet  is  issued  for  each  part,  to  each  foreman  in  charge  of  any 
operations  on  the  part.  The  rate  sheet  gives  a  description  of  each  operat^^/ 
the  number  of  the  department  in  which  the  operation  is  performed  the  nZ- 
ber  of  the  machine  on  which  it  is  performed,  the  hourly  production  at  wS 
the  premium  rate  starts,  and  the  price  per  piece 

given'^r  tS  ttmf  stdy  trT""  "^^^^'^^^  ^'^  ^^^^^^^^^  ^'  ''^  ^^^^^^^  - 
In  case  the  employe  can  not  maintain  a  satisfactory  rate  of  production 
and  the  correctness  of  the  standard  has  been  established,  a  time  stujy  of  the 
operation  is  made  to  determine  which  elements  are  consUing  more  th^  the 
standard  time.  The  employe  receives  further  instruction  i/ the  Leth^d  of 
performmg  these  elements.  luetnoa  or 

Employes  who  are  constitutionally  unable  to  produce  at  a  satisfactorv 
rate,  are  transferred  to  other  operations  for  which  they  are  adapted.  ^ 

RETAINER   PAY: 

^^Employes  are  paid  their  basic  hourly  wages  while  learning  an   opera- 

PAYMENT   OP   INCENTIVES: 

is  so^sVthat  r"''  ""^  **""  production  standard,  the  piece  rate  for  an  operation 

*h.  a^^A  ^  *^!  employe  produces  at  a  rate  which  is  less  than  70%  of 
the  standard  rate  of  production,  he  receives  only  his  basic  hourly  wage 
ofo  P\  If  the  employe  produces  at  a  rate  which  is  over  70%  of  the 
standard  rate  of  production,  his  earnings  give  him  a  slight  premium 
over  his  basic  hourly  wages.  As  his  rate  of  production  increLes  hS 
earnings  continue  to  increase.  ^creases,  nis 


r 


» 


^■'!||i' 


18 


Employes*  Incentive  Flans 


(3)  When  the  employe  produces  at  a  rate  which  is  100%  of  the 
standard  rate  of  production,  his  premium  earnings  are  approximately  25% 
more  than  his  basic  hourly  wages. 

The  basic  hourly  wage  is  approximately  the  market  rate  for  the  class  of 
labor  required. 

GUAKANTEE  OP  EABNINQSt 

The  company  guarantees  that  the  employe  will  not  earn  less  than  the 
base  wage  at  which  he  is  employed. 

IDLE  time: 

Employes  are  paid  at  their  basic  hourly  rate  for  idle  time  due  to  causes 
beyond  their  control,  such  as  lack  of  work,  machinery  breakdowns  or  other 
delays  of  a  similar  nature. 

MAINTENANCE  OP  QUALITY : 

The  piece  price  is  not  paid  for  work,  spoiled  because  of  faulty  workman- 
ship. 

In  flagrant  cases  of  spoilage,  the  employe  may  forfeit  his  piece  work 
earnings  in  excess  of  his  guaranteed  day  wages  at  the  discretion  of  the  man- 
agement. 

EMPLOYES  PRODUCTION  RECORDS:  ^ 

A  daily  production  report  is  made  from  the  employees  time  cards,  and  is 
sent  to  the  Superintendent  of  each  production  center  showing: 

(a)  The  employe's  number 

(b)  Part  number 

(e)  Operation  number 

(d)  Total  pieces  produced 

(e)  Hours  worked  on  the  operation 

(f )  Pieces  per  hour  representing  100%  production 

(g)  Pieces  per  hour  actually  produced 

(h)     Past  hourly  production — ^high  and  low. 

This  record  not  only  checks  production  but  it  enables  the  management  to 
detect  inaccuracies  in  its  standards.  i«    j  ^    v 

A  further  check  on  the  accuracy  of  the  standards  is  afforded  by  a 
"Prffliiium  Work  Summary,-  a  record  of  performance  for  each  operation 
on  each  part,  which  collects  the  following  data. 

(a)  Order  Number 

(b)  Operator's  number 

(c)  Part  number 

(d)  Output  (number  of  pieces  produced) 

(e)  Hours  (time  taken  to  complete  the  number) 

(f )  Pieces  per  hour 

(g)  Machine  number 

(h)     Date  operation  was  worked  on 
No  record  is  kept  of  the  individual  workman's  efficiency. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  Company  has  noticed  a  marked  improvement  in  the  results  obtained 
by  the  various  departments.     Production  has  increased  but  ^^^  ff"«  ^l^^f^^^^ 
of  work  is  being  maintained.    There  is  less  supervision  required  as  each  man  s 
increased  earnings  are  dependent  upon  his  own  efforts. 


Cleveland  Individual  Incentive  Plans  19 

SUMMARY  OF  INDIVIDUAL  INCENTIVE  PLANS 

The  essential  feature  in  plans  of  this  type  is  the  offering  of  individual 
incentives  based  on  aceomplishment.  An  equal  opportunity  is  afforded  to  aU 
workmen  to  increase  their  earning  capacity  and  better  their  condition  through 
the  exercise  of  greater  diligence  in  the  performance  of  their  tasks  and  in  the 
perfection  of  their  skill. 

The  payment  of  incentives,  based  on  accomplishment,  presupposes  the 
existence  of  some  production  standard  by  which  such  accomplishment  can 
be  measured.  Analysis  of  individual  incentive  plans  indicates  that  in  most 
instances : 

(1)  Such  standards  are  determined  by  time  study,  whenever  practical. 
Time  study  IS  understood  to  mean  (a)  the  analysis  of  an  operation  into  its 
elements  and  the  determination  of  the  best  methods,  (b)  the  scientific  de- 
termmation  of  a  standard  time  for  each  element,  (c)  the  study  and  synthesis 
hi  these  elemental  times,  (d)  the  determination  of  a  standard  operation  time 
mcluding  due  allowance  for  fatigue  and  necessary  delays.  ' 

(2)  The  determination  and  recording  of  elemental  times  is  done  in  the 
workman  s  presence.  He  is  informed  of  the  reasons  for  taking  the  time 
study  and  his  co-operation  enlisted. 

(3)  Time  studies  are  based  on  an  average  workman's  performance. 

(4)  Great  care  is  exercised  to  insure  the  accurate  determination  of  pro- 
duction standards.  The  employes  are  guaranteed  the  full  benefit  of  their 
earning  power  without  fear  of  an  increase  of  the  production  standard,  unless 
a  change  of  method  is  made. 

The  instruction  of  the  workmen,  in  the  best  method  of  performing  an 
operation,  is  correlative  with  the  determination  of  production  standards 
Proper  instruction  is  usually  an  important  factor  in  the  success  of  an  indi- 
vidual incentive  plan.  In  some  cases,  the  employes  receive  a  retainer,  often  a 
certain  guaranteed  proportion  of  their  wages,  for  a  limited  time  while  thev 
are  learning  an  operation.  ^ 

There  are  many  methods  of  applying  the  principle  of  payment  in  pro- 
portion to  productive  ability.  The  principal  methods,  offering  incentives  for 
mcreased  production,  are: 

(1)  Straight  Piece  Work 

The  workman  is  paid  a  certain  price  per  piece  for  each  piece  produced. 

(2)  Guaranteed  Piece  WorJc 

Similar  to  straight  piece  work  except  that  the  employes'  basic  hourly  wages 
and  the  production  standards  are  guaranteed. 

(3)  Differential  Pilece  Work 

»,n„.i^  ^'^"^^  ""l*®  'l.^-  ?®*  *\^*  *^^  employe  will  earn  approximately  his  basic 
hourly  wages  by  attaining  the  production  standard.  Payment  for  all  pieces 
produced  m  excess  of  the  standard,  is  made  at  a  much  higher  rate. 

(4)  Contract  Work 

Certain  employes  submit  bids  for  a  job.  The  lowest  bidder  is  guaranteed 
his  basic  hourly  wages  and,  on  completion  of  the  work,  receives  the  excess, 
u  any,  of  the  contract  price  over  wages  received. 

(5)  Time  Work  With  Production  Standards 

Each  job  is  time  studied  and  individual  records  of  efficiency  posted 
periodically.  Discharge,  lay-offs,  promotions  and  wage  increases  are  made 
on  the  basis  of  these  records. 

(6)  Time  Premium  Plan 

A  standard  production  per  hour  is  determined  by  time  study.  The  em- 
compVt^!'''''  '^''^  ^^^'  ^*  ^  ^'''''^^  '^^'  ^""^  ^'^^  production  hour 


14 


' 


20 


Employes*  Incentive  Plans 


Cleveland  Individual  Incentive  Flans 


21 


I 


(7)  The  Ealsey  Fremium  Plan 

A  standard  time  is  set  for  each  job.  The  employe  receives  his  basic 
hourly  wages  plus  a  certain  percentage  of  the  value,  at  his  hourly  rate,  of 
the  time  saved. 

(8)  The  Bowan  Premium  Plan 

The  workman  receives  his  hourly  wages  plus  a  premium  equal  to  the 
value,  at  his  hourly  rate,  of  the  time  actually  taken,  multiplied  by  the  ratio 
of  the  time  saved  to  the  standard  time. 

(9)  Gantt  Task  and  Bonus  Plan 

If  a  given  task  is  completed  within  the  standard  time,  the  employe  re- 
ceives, in  addition  to  his  basic  hourly  wages,  a  premium  equal  to  a  certain 
percentage  of  the  value,  at  his  hourly  rate,  of  the  standard  time. 

(10)  The  Parkhurst  Differential  Bonus  Plan 

A  standard  bonus,  which  may  be  earned  by  accomplishing  100%  of  ft 
standard  task,  is  set  for  each  class  of  employes.  Graduated  bonuses  based 
on  the  standard  bonus,  are  paid  for  accomplishing  given  proportions  of  the 
standard  task.     (See  Aluminum  Manufactures  Plan.) 

(11)  The  Emerson  Efficiency  Plan 

When  the  employe's  efficiency,  considered  to  be  the  percentage  of  the 
standard  time  to  the  time  actually  taken  is  66-2/3%,  he  receives  a  small 
bonus.     As  his  efficiency  increases,  the  bonus  increases  rapidly. 

(12)  The  Premium  Point  System 

The  standard  performance  time  for  an  operation  is  ejcpressed  in  points 
Each  point  is  equivalent  to  one  minute.  The  value  of  a  point  is  equal  to  the 
employe's  basic  hourly  wage  rate  divided  by  60.  In  addition  to  hourly  wages, 
the  employe  receives  the  value  of  all  points  accumulated  in  excess  of  the 
standard  number  of  points  for  the  work  period. 

(13)  The  Diemer  Bonus  and  Premium  Plan 

A  variant  of  the  Gantt  and  Halsey  methods. 

Many  concerns  guarantee  that  their  employes'  earning  capacity  will 
not  be  impaired  because  of  new  methods  or  other  causes  beyond  their  con- 
trol. In  some  plans,  it  is  guaranteed  that  the  employes  will  not  be  paid  less 
than  their  basic  hourly  wages  while  in  others  they  are  paid  their  basic  hourly 
wages  for  time  lost  due  to  insufficient  supply  of  work,  unavoidable  idle  time, 
work  for  which  there  is  no  production  standard,  and  similar  conditions.  Guar- 
antee of  earnings  usually  strengthens  the  workman's  confidence  in  the  fair- 
ness of  such  plans,  and  meets  a  common  objection  to  the  offering  of  wage 
incentives. 

In  general,  experience  does  not  show  that  the  offering  of  incentives 
depreciates  the  quality  of  the  product  nor  greatly  increases  the  cost  of  in- 
spection. Specialization,  the  offering  of  an  incentive  and,  in  most  instances, 
the  fact  that  no  payment  is  made  for  spoiled  work,  often  increase  individual 
skill  and  the  quality  of  the  work. 

As  a  further  incentive,  many  concerns  maintain  records  of  employes'  pro- 
ductive efficiency.  These  serve  as  a  basis  for  promotion,  transfer  and  dis- 
charge, and  enable  the  management  to  check  the  daily  performance  of  the 
workmen  and  the  accuracy  of  standards. 

In  some  instances,  individual  incentive  plans  have  increased  produc- 
tion 25%  to  100%,  wages  20%  to  90%,  and  have  reduced  costs  10%  to 
30%  or  more. 

The  majority  of  the  successful  plans  observe  the  following  principles: 
(1)    The  best  production  methods  and   standards  are  determined,   pre- 
ferably by  time  study  or  other  scientific  methods. 


(2)  Provision  is  made  for  the  instruction  of  the  workmen  in  the  proper 
performance  of  these  methods. 

(3)  The  standard  production  time,  once  set,  is  not  reduced  unless  the 
operation  method  is  changed. 

(4)  Wage  incentives  are  offered  for  increased  production.  The  methods 
of  payment  are  designed  to  meet  the  needs  of  each  individual  business. 

(5)  Employes  are  paid  their  basic  hourly  wages  for  day  work  and  idle 
time  not  due  to  their  negligence,  provided  they  are  required  to  remain  in 
their  work  places. 

(6)  In  many  instances,  employes'  production  records  are  maintained  as 
an  aid  to  promotion  and  discharge,  a  check  on  individual  production  and 
the  accuracy  of  standards. 


f. 


CLEVELAND  PROFIT  SHARING  PLANS 


TYPES 

1.  The  Browning  Company 

2.  The  Underwood  Typewriter  Company  (branch) 

3.  The  Willys-Overland  Company  (branch) 

4.  The  Cleveland  Twist  Drill  Company 

5.  The  Astrup  Company 

6.  The  W.  S.  Tyler  Company 

SUMMABY 


Cleveland  Profit  Sharing  Plans 


25 


THE  BROWNING  COMPANY 

16226  Waterloo  Boad 


FBINOIPAL  business: 

NUMBER  OP  PEOPLE  EMPLOYED: 

PLAN  WAS   ESTABLISHED  IN: 


Manufacture  of  locomotive  cranes. 

600. 

1917. 


I 


\: 


!:|l 


' 


ELIGIBILITY  TO  PARTICIPATE: 

In  order  to  participate,  the  employe  must  have  been  on  the  payroll  con- 
tinuously for  three  months  prior  to  the  close  of  the  profit  sharing  period,  and 
must  still  be  in  the  employ  of  the  company  on  the  date  of  payment  of  the 
profit  share.  Subject  to  this  condition,  all  employes,  including  company 
officers,  are  eligible. 

EXTENT  OP  PARTICIPATION: 

Approximately  96%  of  the  employes  participate  in  the  plan. 

DETERMINATION    OP   THE    FUNDS    AVAILABLE    POR   DISTRIBUTION    AMONG    THB   EM- 
PLOYES : 

At  the  end  of  each  quarterly  period,  there  is  set  aside  out  of  the  net 
profits,  exclusive  of  taxes,  an  amount  equal  to  1%%  on  the  outstanding  capital 
stock  and  surplus  as  a  fair  return  on  the  invested  capital.  Ten  per  cent,  of 
the  remaining  profit  is  then  set  aside  for  distribution  among  the  employes. 

DETERMINATION  OP  THE  INDIVIDUAL  SHARE: 

The  profit  sharing  fund  is  pro-rated  among  the  employes  on  the  following 
basis:  Those  employed  more  than  three  months  but  less  than  one  year  share 
in  the  ratio  of  their  total  salary  for  the  profit  sharing  period  to  the  total 
amount  of  salary  and  profit  sharing  allowances  of  all  of  the  employes  par- 
ticipating. 

Those  employed  between  one  and  two  years  share  on  the  basis  of  their 
total  salary  plus  an  allowance  of  ten  per  cent,  for  the  purpose  of  computing 
their  profit  share. 

Each  year  thereafter  an  additional  allowance  of  ten  per  cent,  is  added 
for  the  purpose  of  computing  the  profit  share.  When  the  employe  has  served 
continuously  five  years  or  longer,  his  profit  share  is  computed  on  the  basis 
of  his  salary  plus  an  allowance  of  50%. 

Except  as  above  described,  there  is  no  limit  on  the  amount  of  the  em- 
ploye's profit  share. 

PAYMENT   OP   THE   PROPIT    SHARE: 

The  profit  share  is  paid,  by  check,  on  the  first  pay  day  in  February,  May, 
August  and  November. 

FORFEITURE : 

Employes  leaving  voluntarily  or  by  discharge,  forfeit  their  right  to  the 
profit  share  for  the  current  period.  The  amount  forfeited  is  distributed  to 
eligible  employes. 

Employes,  who  are  necessarily  laid  off,  receive  the  profit  share  earned  by 
them  during  the  current  period.  If  reemployed,  they  retain  their  former 
status  as  to  length  of  service. 

Sickness,  death  or  layoff  has  no  effect  on  the  right  to  participate  in  the 
profits  for  the  current  period. 

ADMINISTRATION    OP    THE    PLAN: 

In  connection  with  the  profit  sharing  plan,  there  is  a  system  of  employe 
representation.  Two  representatives  (one  for  the  day  force  and  one  for  the 
night  force)  are  elected  by  employes  of  each  department.  These  representa- 
tives meet  regularly,  twice  each  month,  with  an  official  of  the  company  and 
make  recommendations  on  all  appropriate  subjects. 


11 


M 


26 


Employes*  Incentive  Plans 


The  employes,  through  their  representatives,  can  verify  the  company's 
statement  of  the  profits. 

The  profit  sharing  plan  may  be  modified  at  the  discretion  of  the  board 
of  directors. 

BHASONS   GIVEN   FOB   THE  INSTALLATION   OP  THE  PLAN: 

It  is  stated  that  the  installation  of  the  plan  was  prompted  by  *  *  intelligent 
selfishness.*'  It  was  believed  that  tiiese  means  would  prove  effective  in 
creating  a  spirit  of  co-operation  and  good  will  among  the  employes  for  the 
good  of  the  whole  organization. 

RESULTS  REPORTED  BY  THE  EMPLOYEE: 

A  fact  which  is  largely  attributed  to  the  above  plan,  the  average  annual 
production  of  pounds  per  man  during  the  two  years  ending  June  30,  1920,  as 
compared  with  the  year  ending  June  30,  1918,  increased  26.7%.  During  this 
two  year  period  turnover  was  radically  reduced. 

The  employes  are  apparently  enthusiastic  over  the  plan. 


THE  XTNDERWOOD  TYPEWRITER  COBIPANY 

(Branch  Office) 
820  Huron  Road 


PRINCIPAL  business:  Typewriter  sales  office. 

number  op  people  employed:     6760.     Cleveland  office — 65. 
PLAN  WAS  established  IN:  1916. 


m 


ELIGIBILITY  TO  PARTICIPATE: 

All  employes  who  have  two  or  more  full  years  of  service  on  December  31st 
of  any  year  and  are  still  employed  on  April  Ist  next,  participate  in  the  dis- 
tribution for  the  year. 

EXTENT  OF  PARTICIPATION: 

In  1919,  46%  of  employes  participated. 

DETERMINATION    OP   THE    FUNDS   AVAILABLE   FOR    DISTRIBUTION    AMONG   THE    EM- 
PLOYES : 

Twenty  per  cent,  of  the  net  profits,  excluding  amortization  funds  and 
dividends,  is  set  aside  for  employes.  Of  this  20%,  five  parts  go  to  group  No.  1, 
composed  of  employes  having  five  or  more  years  of  service,  three  parts  to 
group  No.  2,  having  from  three  to  five  years,  and  two  parts  to  those  employed 
from  two  to  three  years. 

DETERMINATION  OF  THE  INDIVIDUAL  SHARE: 

The  profit  share  for  eaith  group  is  divided  among  its  members  on  the 
basis  of  wages  earned.  Each  member  is  entitled  to  a  share  based  on  his  wages 
in  proportion  to  the  total  wages  of  the  group.  This  share  is  credited  to  the 
employe's  account. 

t 

PAYMENT  OP  THE  PROFIT  SHARE: 

The  credits  to  the  employes  are  made  April  1st  and  form  a  fund  for 
purchasing  stock  of  the  company  for  the  employes. 

FORFEITURE : 

Any  person  selling  his  stock  without  consent  of  the  trustees  of  the  profit 
sharing  plan  forfeits  his  profit  sharing  rights  for  one  jear. 

In  case  of  death,  the  employe's  estate  receives  the  full  amount  standing 
to  his  credit. 


Cleveland  Profit  Sharing  Plans 


27 


ADMINISTRATION  OP  THE  PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan.  Five 
trustees  have  been  selected  by  the  board  of  directors  of  the  company.  These 
trustees  receive  and  handle  the  funds  to  be  distributed  to  the  employes.  The 
decision  of  the  trustees  is  final  in  matters  relating  to  the  fund. 

STOCK  PURCHASING  FEATURES: 

As  soon  as  the  credits  of  any  employe  reach  a  sufficient  amount,  the 
trustees  invest  the  money  in  the  common  stock  of  the  company.  Liberty  Bonds 
or  other  good  security.  Stock  of  the  company  is  sold  to  the  employe  at  the 
market  price.  Each  year,  including  1919,  an  extra  dividend  in  addition,  and 
equal,  to  the  regular  company  dividend  has  been  paid,  by  the  trustees,  to  all 
employes  holding  their  stock  through  the  year  immediately  preceding.  This 
extra  dividend  was  forfeited  if  the  stock  was  sold  or  the  employe  resigned  or 
was  discharged.  He  may  withdraw  all  other  sums  on  three  months'  notice 
with  the  approval  of  the  trustees. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OP  THE  PLAN: 

It  was  intended  to  create  a  fund  for  use  by  employes  or  their  families  in 
case  of  sickness  or  death;  to  promote  closer  relations  with  employes;  and  to 
share  with  them  the  results  of  their  own  increased  efficiency. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  has  obtained  the  co-operation  of  the  employes  and  has  aroused  their 
interest  in  the  welfare  of  the  company. 


THE  WILLYS-OVERLAND  COMPANY 

(Branch  Office) 
6604  Euclid  Avenue 


PRINCIPAL  BUSINESS:    . 
NUMBER   OF   PEOPLE  EMPLOYED: 
PLAN   WAS   ESTABLISHED  IN: 


Automobile  sales  and  service. 
About  20,000.     aeveland  office— 110. 
January,  1919. 


ELIGIBILITY   TO  PARTICIPATE: 

Every  employe  of  six  months  or  longer  is  eligible  to  participate. 

EXTENT  OF  PARTICIPATION: 

Not  stated. 

DETERMINATION    OF    THE    #UNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE    EM- 
PLOYES: 

After  setting  aside  out  of  the  net  profits  7i/^%  on  the  permanent  capital, 
(the  net  book  value  of  assets,  not  including  good  will,  patents,  trade  marks, 
etc.),  as  a  return  to  capital,  3%  to  cover  depreciation,  and  1%  as  a  contingency 
fund,  the  company  divides  remaining  profits  equally  between  the  stockholders 
and  employes. 

DETERMINATION  OF  THE  INDIVIDUAL  SHARE: 

The  employe's  share  is  pro-rated  among  the  individual  employes  on  the 
basis  of  the  wages  earned  by  them  during  the  profit  sharing  period. 

When  the  employes'  share  of  the  profits  for  a  given  profit  sharing  period 
is  6%  to  8%  of  the  total  wages,  6%  of  his  wages  for  the  profit  sharing  period 
is  credited  to  each  employe,  except  that  he  does  not  receive  a  share  equivalent 
to  less  than  four  cents  per  hour  for  each  hour  worked. 

When  the  employes'  share  is  8%  to  10%  of  the  total  wages,  8%  of  his 
wages  is  credited  to  each  employe  except  that  no  employe's  share  is  less  than 
four  and  one-half  cents  per  hour. 


28 


Employes*  Incentive  Plans 


Cleveland  Profit  Sharing  Plans 


29 


i! 


men  the  employe's  share  is  10%  or  more,  10%  of  his  wages  is  credited 
to  each  employe  except  that  no  employe 's  share  shall  be  less  than  five  cents 
per  hour. 

In  any  period,  the  excess  of  the  amount  credited  to  each  employe  is  carried 
to  his  credit  until  the  foUowing  March,  when  a  final  adjustment  is  made.  The 
books  are  closed  for  the  year  on  December  31st. 

PAYMENT  OF  PEOFIT  SHABIS: 

Profit  shares  are  paid  in  cash. 

Distributions  are  made  in  April  for  January,  February  and  March,  in 
July  for  April,  May  and  June,  in  October  for  July,  August  and  September, 
«nd  on  December  24th  for  October  and  November.  The  December  profit  share 
IS  paid  m  March  together  with  the  excess  from  previous  distributions  and  the 
adjustments  between  books  and  inventory. 

PORFEITUBE: 

Employes  who  are  discharged  for  cause  or  who  are  absent  two  consecutive 
days  or  three  tmies  in  thirty  days  without  an  acceptable  excuse,  forfeit  their 
profit  sharing  privileges. 

Disposition  of  the  sums  forfeited  is  decided  on  the  merits  of  the  case  by 

ABMINISTEATION  OP  THE  PLAN: 

The  plan  is  administered  by  the  ** 60-50  Division''  consisting  of  five  men 
elected  by  the  factory  employes  and  five  men  selected  by  the  company. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

It  was  desired  to  improve  the  relations  between  the  company  and  its 
employes  and  to  enlist  the  employe's  co-operation. 

RESULTS  REPORTED  BY  THE  EMPLOYEE: 

It  is  believed  that  the  plan  has  improved  the  company's  labor  relations 
and  increased  the  individual  efficiency,  though  this  is  hard  to  prove  in  view 
of  the  peculiar  conditions  existing  during  the  past  year. 

THE  CLEVELAND  TWIST  DRILL  COBIPANY 

1242  East  49th  Street 


PRINCIPAL  BUSINESS: 

NUMBER   OF  PEOPLE  EMPLOYED: 

PLAN   WAS   ESTABLISHED  IN: 


Manufacture  of  twist  drills,  reamers,  etc. 
1400. 
1915. 


ELIGIBILITY  TO  PARTICIPATE: 

Everyone  on  the  payroll  is  eligible  to  participate  providing  that  (1) 
participant  is  a  bona  fide  employe  at  the  time  the  distribution  is  made;  and 
(2)  he  does  not  receive  a  share  of  the  profits  from  any  other  source  except 
regular  dividends.  ^ 

EXTENT  OF  PARTICIPATION: 

Approximately  75%  of  the  employes  participate  under  this  plan. 

DETERMINATION    OF    THE    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG   THE    EM- 
PLOYES : 

After  providing  necessary  reserves,  dividends  of  8%  on  the  invested  capital 
are  paid  out  of  the  net  profits.  The  remaining  profits  are  divided  between 
the  stockholders  and  the  employes  in  the  ratio  of  invested  capital  to  payroU. 


DETERMINATION  OP   THE  INDIVIDUAL   SHARE: 

The  share  of  the  employe  varies  with  his  length  of  service  with  the  com- 
pany, and  his  earnings  during  the  profit  sharing  period.  Those  having  two 
years'  service  receive  a  dividend  on  wages  at  the  same  rate  at  which  the  stock- 
holders receive  extra  dividends.  Those  employed  one  to  two  years  receive  a 
dividend  at  three-fourths  rate.  Those  employed  less  than  one  year  receive 
dividends  at  one-half  rate. 

There  is  no  limit  to  the  size  of  the  profit  share. 

PAYMENT    OF    THE   PROFIT    SHARE: 

Profit  shares  are  paid  in  cash,  annually  in  December. 

FORFEITURE : 

Employes  forfeit  their  profit  sharing  rights  in  case  they  resign  or  are 
discharged. 

In  case  of  sickness,  death,  or  temporary  lay-off,  a  dividend  is  paid  on  the 
employe's  actual  earnings  during  the  profit  sharing  period. 

ADMINISTRATION  OF  THE  PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan,  but  are 
thoroughly  informed  regarding  it. 

The  company  may  modify  the  plan  at  will. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

It  was  installed  as  a  means  of  linking  the  success  of  the  company  with 
the  prosperity  of  the  employes,  and  as  a  means  of  stabilizing  the  working 
force. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  company  feels  that  the  plan  has  helped  to  increase  the  efficiency  of 
the  employes  and  to  stabilize  the  working  force,  and  has  improved  the  rela- 
tions between  the  company  and  its  employes. 

PARTICIPATION    CERTIFICATES : 

In  addition  to  the  regular  profit  sharing  plan,  all  employes  of  five  years 
standing  are  permitted  to  purchase  ** participation  certificates."  These  cer- 
tificates have  no  fixed  value,  but  employes  may  pay  $10.00  or  multiples  thereof, 
on  them.  The  amounts  paid  are  endorsed  on  the  certificate  and  draw  6% 
interest.  In  addition,  a  dividend  is  paid  on  amounts,  deposited  with  the  com- 
pany for  a  full  year,  at  a  rate  equsd  to  the  dividend  rate  on  the  book  value 
of  the  capital  stock  above  8%.  A  certificate  is  non-transferable,  but  the 
holder  may  surrender  it  at  any  time  and  withdraw  the  amount  represented  by 
it  and  6%  interest.  He  can  invest  an  amount  in  the  certificate  equal  to,  but 
not  exceeding,  the  amount  of  his  annual  earnings.  The  company  may  redeem 
or  recall  the  certificate  at  any  time  at  its  face  value  plus  accrued  interest  at 
6%.    An  employe  leaving  the  service  must  surrender  his  certificate. 


THE  ASTRUP  COMPANY 

2937  West  25th  Street 


PRINCIPAL  business  :        Manufacture  of  awnings,  tents,  and  awning  hardware. 

NUMBER    OF    PEOPLE   EMPLOYED:  80-100. 

PLAN  WAS  ESTABLISHED  IN:  January  1,  1920. 

eligibility  to  participate: 

All  employes,  including  officers,  participate  after  one  year  of  continuous 
service  with  the  company,  ending  January  1st. 


I« 


30 


Employes*  Incentive  Plans 


Cleveland  Profit  Sharing  Plans 


31 


lit 


EXTENT  OP  PARTICIPATION: 

Approximately  75%  to  80%  of  the  total  number  of  employes  participate. 
Thifl  includes  officers  of  the  company.  ^      ^      ^^pa-Mj. 

DETERMINATION    OP   THE    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE    EM- 
PLOYES : 

r..n4it  "^T?'"*  ^^  ^^"^  ^\  ^^^  mvested  Capital  is  first  provided  out  of  the  net 
profits  Next  an  amount  equal  to  12%  of  the  invested  capital  is  set  aside  as 
tn^  /Sa  .  ^?^?°8io°  o^  *he  business.  The  remaining  net  profit  up  to 
ffltCi  *^%f  ""^'^^i  ''T^^^  ll  distributed  among  the  employes  exclusive  of 
S^^  -^v^^^  ?.?^*  ^^''''^  2^^^  *^^  *^®  invested  capital  is  divided  equaUy 
between  the  stockholders  and  employes,  including  salesmen. 

DETERMINATION  OP  THE  INDIVIDUAL  SHARE: 

»o„o^^*'***u°'?^?t'^  Share  Of  the  profits  is  based  on  the  proportion  of  his 
wages  to  the  total  wages  of  those  participating. 

PAYMENT  OP  THE  PROFIT  SHARE: 

The  profit  share  is  paid  in  cash  at  the  close  of  the  fiscal  year. 

FORFEITURE : 

char^d*^*  sharing  rights  are  forfeited  when  an  employe  resigns  or  is  dis- 
Sickness,  death  or  layoff  has  no  effect  upon  the  right  to  participate. 

ADMINISTRATION   OF  THE   PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan.    Thev  can 
venfy  the  company's  statement  of  the  profits. 
The  management  can  alter  the  plan  at  will. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

It  was  introduced  to  promote  cooperation  among  employes. 

RESULTS   REPORTED  BY  THE  EMPLOYER: 

The  plan  has  been  in  operation  for  too  short  a  time  to  judge,  but  appar- 
ently It  has  aroused  interest  and  tends  to  hold  men. 

THE  W.  S.  TYLER  COMPANY 

3615  Superior  Avenue 


PRINCIPAL  BUSINESS :  Manufacture  of  wire  cloth  and  mining  screens. 

number   op   PEOPLE   EMPLOYED:       1,000. 
PLAN    WAS    ESTABLISHED    IN:  1914. 

ELIGIBILITY  TO  PARTICIPATE: 

Ail  those  employed  continuously  for  six  months  are  eligible  to  participate. 

EXTENT  OF  PARTICIPATION: 

Fully  80%  of  the  total  number  of  employes  participate. 

DETERMINATION    OP    THE    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE    EM- 
PLOYES : 

The  principles  on  which  the  plan  is  based  are: 

,.   .S}^     ^^1    employes,    without    regard    to    class    of    employment,    are 
eligible.  ' 

(2)     Employes  participate  in  any  and  all  dividends  (aside  from  6% 
interest  on  capital).  ' 


(3)  No  rules  for  qualification  are  required  under  the  plan,  nor  are 
any  penalties  imposed  depriving  employes  of  dividends. 

(4)  All  dividends  are  based  on  the  total  wages  paid,  including  pay- 
ments for  bonuses,  premiums  or  overtime. 

Out  of  net  earnings,  6%  interest  is  paid  on  the  capital  stock,  included  in 
the  first  dividend  of  the  year.  After  this  has  been  provided,  the  eligible 
employes  participate  in  all  cash  dividends  paid  during  the  year.  They  receive 
a  dividend  on  their  total  wages  or  salaries  for  the  preceding  year  ending 
December  31st  at  the  rate  paid  on  the  capital  stock.  The  amount  disbursed 
as  dividends  varies  annually  with  business  conditions. 

DETERMINATION    OP   THE   INDIVIDUAL    SHARES: 

The  profit  sharing  employes  are  divided  into  two  classes,  as  follows: 
Class  A:     Those  employed  one  year  or  more  on  December  Slst  of  the  pre- 
ceding year,  receive  dividends  on  their  wages  at  the  same  rate  paid  to  stock- 
holders. 

Class  B:  Those  employed  six  months  to  one  year  receive  dividends  at  one- 
half  rate. 

PAYMENT  OF  THE  PROFIT   SHARES: 

The  profit  share  is  paid  in  cash,  and  usually  at  the  end  of  each  quarterly 
period  during  the  succeeding  year.  This,  however,  is  subject  to  change  if,  in 
the  opinion  of  the  management,  conditions  warrant  it. 

FORFEITURE : 

The  profit  sharing  privilege  is  forfeited  by  an  employe  leaving  the  serv- 
ice of  the  company  for  any  reason  whatsoever.  Sickness  or  layoff  has  no 
effect  upon  the  right  to  participate. 

ADMINISTRATION   OF  THE   PLAN: 

Employes  have  no  voice  in  the  administration  of  the  plan  and  cannot 
verify  the  company's  statement  of  the  profite. 
The  directors  may  modify  the  plan  at  wilL 

REASONS  GIVEN  FOR  THE  INSTALLATION  OP  THE  PLAN: 

The  plan  was  installed  because  the  company  desired  to  benefit  the  em- 
ployes and  share  its  prosperity  with  them. 

RESULTS    REPORTED   BY   THE   EMPLOYER: 

While  not  primarily  intended  to  increase  the  efficiency  of  the  workmen 
it  has  had  this  effect.  It  has  maintained  a  loyal  force  through  the  last  few 
years. 


SUMMARY  OF  PROFIT  SHARING  FLANS 

The  following  table  shows  the  date  of  installation  of  the  profit  sharing 
plans  described,  the  general  type  of  business  and  the  number  of  employes  in 
each  case. 


Plan  No. 

Type  of  Business 

Plan  Installed  in 

Number  Employed 

I 
2 
3 
4 
6 
6 

Manufacturing 

1919 
1914 
1916 
1920 
1916 
1917 

20,000  (local  110) 
1,000 
6,760   (local  65) 

100 
1,000 

500 

With  one  exception,  these  plans  were  established  after  1914. 


Employes*  Incentive  Plana 


Cleveland  Profit  Sharing  Plans 


33 


iii> 


Probationary  Period 

6  months 
6  months 

2  years 
1  year 

none 

3  months 

KLIQIBILITY: 

While  all  employes  are  eligible  to  participate  in  the  profits,  it  is  usually 
required  that  they  first  serve  a  probationary  period. 

PUm  No, 

1 
8 

3 
4 
ff 
6 

This  indicates  the  sentiment  in  favor  of  a  short  period  of  probation. 

The  length  of  the  probation  period  is  influenced,  to  a  large  extent,  by  the 
character  and  intelligence  of  the  employes  who  participate  and  generally,  is 
shorter  for  the  lower  grades  of  labor. 

Certain  plans  have  other  conditions  ef  eligibility.  In  four  cases,  it  is 
required  that  the  participating  employes  must  be  in  the  employ  of  the  com- 
pany at  the  time  the  distribution  of  the  profits  is  made.  In  another  case,  an 
employe  is  not  eligible  to  participate  in  the  profits,  if  he  receives  a  share  of  the 
profits  from  any  source  except  dividends. 

EXTENT  OF  PARTICIPATION   AND   SIZE   OF   THE   PROFIT   SHARE   EXPRESSED   AS    PER- 
CENTAGE OP  THE  EMPLOYE 'S  WAGES  AND  OF  THE  TOTAL  PAYROLL : 


Firm  No. 

1 
2 
3 
4 
5 
6 


Per  cent,  of  total 

number  of  employes 

who  participate 


80% 

4Q% 

75%-85% 

75% 

96% 


Per  cent,  of  wages 
received  as 
profit  share 

•   ••■••■• 

25%-35% 


Per  cent,  of  total 

payroll  paid  out 

as  profit  share 


20%-25% 


15%-20% 
10% 
8%-10% 


12% 
7% 

re 


The  lowest  average  percentage  of  their  wages,  which  employes  receive 
am  ft  profit  share,  is  about  10%. 

DETERMINATION    OF   THE    FUNDS    AVAILABLE   FOE    DISTRIBUTION    AMONG    THE    EM- 
PLOYES : 

There  is  a  variation  in  the  rates  which  are  considered  a  fair  return  for 
the  use  of  capital.  One  firm  deducts  from  the  profits,  6%  interest  on  the  value 
of  the  capital  stock.  Another  allows  7%,  while  two  more  allow  8%,  on  the 
capital  stock  and  surplus.  In  one  instance  the  rate  is  7%%  on  the  net  book 
value  of  the  assets. 

In  every  case,  an  amount  representing  a  fair  return  on  invested  capital 
is  deducted  before  any  profits  are  shared. 

The  methods  of  sharing  the  profits  may  be  summarized  as  follows:  After 
the  return  on  invested  capital  has  been  deducted  from  the  net  profits — 

Plan  1     (a)     3%  is  deducted  from  the  net  profits  for  depreciation. 

(b)  1%  is  deducted  for  a  contingency  fund. 

(c)  Of  the  remaining  profits  50%  is  credited  to  the  employes  and 
50%  to  the  stockholders. 

Plan  2  (a)  The  employes  participate  in  all  dividends  at  the  same  rate  on 
their  wages  that  is  paid  to  the  stockholders  on  the  par  value  of 
their  stock. 

Plan  3     (a)     A  certain  percentage  is  deducted  for  amortization. 

(b)     20%  of  the  remaining  profits  is  divided  among  the  participat- 
ing employee. 


Plan  4     (a)     An  amount  equal  to  12%  of  the  invested  capital  is  set  aside 
for  the  expansion  of  the  business. 

(b)  Profits  remaining  above  this  amount  plus  interest  at  8%  on 
invested  capital,  up  to  25%  of  the  invested  capital,  is  divided 
among  the  employes. 

(c)  The  profit  above  25%  of  the  invested  capital  is  divided  equally 
between  the  employes  and  the  stockholders. 

Plan  5     (a)     Remaining  net  profits  are  divided  between  the  stockholders  and 
the  employes  in  the  ratio  of  the  invested  capital  to  payroll. 

Plan  6     (a)     10%  of  the  remaining  net  profit  is  set  aside  for  distribution 
among  the  employes. 

DETERMINATION   OF   THE   INDIVIDUAL   SHARE: 

In  all  cases,  the  participating  employes  share  in  the  profits  in  proportion 
to  their  wages,  or  some  percentage  of  their  wages. 

In  three  cases,  the  profit  sharing  funds  are  pro-rated,  without  restrictions, 
among  participating  employes,  on  the  basis  of  their  wages  for  the  profit 
sharing  period. 

In  two  cases,  there  are  length  of  service  conditions  whereby  the  employes 
do  not  share  on  the  basis  of  their  total  wages  until  they  have  been  em- 
ployed for  a  certain  period.  Prior  thereto,  the  employes  share  in  the  profits 
on  the  basis  of  certain  percentages  of  their  wages.  These  percentages  in- 
crease as  their  length  of  service  increases  up  to  the  time  when  they  share  on 
the  basis  of  their  full  wages.  In  the  first  of  these  plans  an  employe  who  has 
been  with  the  company  from  six  months  to  one  year,  receives  dividends  on 
his  wages  at  one-half  the  rate  paid  on  the  capital  stock.  Thereafter  he  partici- 
pates at  the  full  rate.  In  the  second,  employes  who  have  had  less  than  two 
years  of  service  participate  as  follows: 

More  than  two  years'  service — full  rate; 

More  than  one  year's,  but  less  than  two  years'  service — three-fourths  rate; 

Less  than  one  year's  service — one-half  rate. 

One  plan  provides  for  an  allowance  increasing  with  length  of  service,  and 
added  to  the  wages  earned  during  the  profit  sharing  period,  to  form  the  basis 
on  which  the  employe's  profit  share  is  computed. 

PAYMENT  OF  TH?  PROFIT  SHARE: 

The  following  table  summarizes  the  method,  time  and  conditions  of  pay- 
ment of  the  profit  shares: 

Conditions  governing 
use  of  profit  share 

^  None 


Plan  No. 

How  paid 

When 

1 

Cash 

Quarterly 

2 

Cash 

Quarterly 

3 

Credited  to  stock 
purchasing  fund 

Yearly 

4 

Cash 

Yearly 

6 

Cash 

Yearly 

0 

Check 

Quarterly 

None 
Can't 
out 
None 
None 
None 


sell   stock   with- 
permission 


With  one  exception,  the  profit  shares  are  paid  in  cash  or  by  check  with- 
out any  conditions  requiring  compulsory  saving,  etc.  The  opinion  seems  to  pre- 
vail that,  while  such  condititons  have  certain  merits,  they  are  not  generally 
advisable. 

The  time  of  payment  is  influenced  by  accounting  rather  than  profit  shar- 
ing considerations.  In  most  cases  where  the  distribution  is  made  yearly,  it  is 
believed  that  a  more  frequent  distribution  would  be  desirable  if  it  were  feasible, 
as  it  would  better  sustain  the  interest  of  the  employes  throughout  the  year. 


Employes*  Incentive  Plans 


WOBFE3TUBM: 

The  most  common  reason  for  forfeiture  is  leaving  the  service  of  the  com- 
panj.  In  four  plans,  employes  forfeit  their  right  to  a  profit  share  by  resig- 
nation or  discharge  before  the  end  of  the  current  period. 

In  one  case,  the  profit  sharing  right  is  forfeited  only  by  discharge. 

In  five  cases,  sickness  or  death  has  no  effect  upon  the  right  to  participate 
in  the  profits  for  the  current  period.  One  plan,  containing  a  stock  purchasing 
feature,  provides  that  the  profits  to  the  employe's  credit  in  the  stock  purchas- 
ing fund,  shall  be  paid  to  the  employe 's  estate  in  the  event  of  his  death. 

Another  plan  has  a  clause  whereby  profit  sharing  rights  are  forfeited  in 
cases  of  absence  or  tardiness  in  excess  of  a  stated  number. 

In  two  plans,  forfeited  profits  are  distributed  among  the  remaining  par- 
tieipants. 

ADMINISTRATION : 

Two  plans  provide  for  some  form  of  employe  representation  whereby  the 
employes  have  a  voice  in  the  administration  of  the  plan. 

The  employes  can  verify  the  company's  statement  of  the  profits  in  two 
others. 

In  every  ease,  the  management  may  modify  the  plan  at  its  discretion. 

One  plan  provides  that  the  profit  sharing  funds,  used  to  purchase  stock, 
ghall  be  managed  by  five  trustees  selected  by  the  company. 

BSASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

Three  firms  stated  that  the  installation  of  their  plan  was  prompted,  at 
least  partly,  by  a  desire  to  obtain  the  interest  and  cooperation  of  their  em- 
ployes. 

Stabilization  of  the  working  force  and  greater  efficiency  are  the  objects 
of  two  more. 

Two  manufacturers  state  that  their  main  reason  for  installing  their  plans 
ifBS  a  desire  to  benefit  their  employes.  In  both  instances,  it  was  considered 
that  the  installation  was  ''good  business.'* 

In  another  case,  one  of  the  objects  was  the  establishment  of  a  fund  for 
death  benefits. 


BESULTS   REPORTED  BY  THE  EMPLOYEE: 

Five  firms  report  that  their  plans  have  resulted  in  increased  cooperation, 
interest  and  efficiency.  In  four  cases,  the  plans  have  been  helpful  in  reduc- 
ing labor  turnover.    In  all  cases,  they  are  considered  beneficial. 


I« 


CLEVELAND  LIMITED  PROFIT  SHARING  PLANS 

TYPES 

1.  Name  Withheld 

2.  Cleveland  Tractor  Company 

3.  The  Hydraulic  Steel  Company 

4.  The  Kiaynee  Company 

5.  The  B.  L.  Marble  Company 

6.  The  Marshall  Drug  Company 

7.  National  Woolen  Company 

8.  Reliable  Stove  Company 

SUMMARY 


Cleveland  Limited  Profit  Sharing  Plans 


37 


NAME  WITHHELD 


PRINCIPAL   business: 

NUMBER    OF    PEOPLE    EMPLOYED: 

PLAN    WAS    ESTABLISHED    IN: 


Manufacture  of  machinery. 

250-300. 

1917. 


jlllU 


\u 


ELIGIBILITY  TO  PARTICIPATE: 

The  superintendent  submits  to  the  president  of  the  company  a  list  of 
employes  who  are  entitled,  in  his  opinion,  to  share  in  the  profits.  The  list  is 
usually  limited  to  employes  whose  ability  contributes  appreciably  to  the  suc- 
cess of  the  business. 

EXTENT  OF  PARTICIPATION: 

Approximately  12%  of  the  employes  participate. 

DETERMINATION    OF   THE   FUNDS    AVAILABLE   FOR   DISTRIBUTION   AMONO   THE   PAR- 
TICIPANTS : 

The  management  states  that  basic  theory  of  the  plan  as  follows: 
The  employes'  contribution  of  labor  is  considered  as  their  investment 
in  the  enterprise  just  ks  is  the  money  contribution  to  the  company's  capital. 
The  current  wages  of  labor,  and  the  current  price  of  capital  are  paid  to  insure 
the  continuance  of  the  labor  and  capital  contributions.  The  extra  incentive 
necessary  to  induce  employes  and  investors  to  take  the  manufacturing  risk  is 
provided  in  the  distribution  of  profits. 

After  paying  6%  on  the  capital  and  surplus  of  the  company  and  retain- 
ing the  necessary  percentage  of  earnings  in  the  business,  the  company  divides 
the  remaining  profits  between  the  stockholders  and  the  participating  employes 
in  the  ratio  of  the  capital  and  surplus  to  the  payrolL 

DETERMINATION   OF   THE  INDIVIDUAL   SHARE: 

The  employes'  share  of  the  profits  is  divided  among  the  participating  em- 
ployes on  the  basis  of  the  wages  earned  during  the  year. 

If  the  stockholders  receive  an  extra  dividend  on  capital  and  surplus,  in 
addition  to  6%,  each  participating  employe  receives  a  dividend  on  his  wages 
for  the  year  at  the  same  rate. 

PAYMENT  OF  THE  PROFIT  SHARE: 

The  profit  shares  are  paid  yearly  in  cash. 
The  profit  sharing  rights  are  non-assignable. 

FORFEITURE : 

Employes  forfeit  their  share  of  the  profits  on  leaving  the  service  of  the 
company  before  the  close  of  the  profit  sharing  period. 

The  superintendent  may  drop  any  one  from  the  profit  sharing  list  at  his 
discretion. 

Sickness,  death  or  layoff  has  no  effect  upon  the  right  to  participate  in 
the  profits  for  the  current  period,  but  the  employe,  or  his  estate,  would  receive 
a  smaller  share  of  the  profits  inasmuch  as  the  amount  of  his  wages  for  the  in- 
complete profit  sharing  period  would  be  less  than  for  the  whole  period. 

ADMINISTRATION    OF   THE    PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan,  and  they 
cannot  verify  the  company's  statement  of  the  profits. 
The  company  can  alter  the  plan  at  wiD. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  purpose  was  to  reward  the  loyalty  of  those  employes  who  had  rendered 
long  and  valuable  services. 

RESULTS   REPORTED  BY   THE  EMPLOYER: 

The  plan  has  been  of  assistance  in  retaining  the  valuable  employes  and 
in  developing  their  loyalty  and  cooperation. 


Employes'  Incentive  Plans 


Cleveland  Limited  Profit  Sharing  Plane 


39 


■^ 


i 


CLEVELAND  TRACTOR  COMPANY 

UOOO  EiTOLiD  Avmnn 


THE  HTDRAULIC  STEEL  COMPANY 

Illuminating  Building 


PRINCIPAL  business: 

NUMBER   OP   PEOPLE   EMPLOYED; 

PLAN    WAS   ESTABLISHED   IN: 


Manufacture  of  tank  type  tractors. 

1201. 

January  1,  1919. 


AMONG  THE  PAB- 


SLIGIBILITY  TO  PARTICIPATE: 

The  decision,  as  to  which  employes  are  eligible  to  join  one  of  the  profit 
vmrmg  groups,  regts  entirely  with  the  management. 

SXTBNT  OP  PARTICIPATION: 

Approximately  25  men,  or  2%  of  the  total  number  employed,  participated 
in  the  management  group;  57  men,  or  4%  of  the  total  number  employed  par- 
ticipate m  the  department  heads  group;  and  60  men,  or  5%  of  the  total 'num- 
ber employed,  participate  in  the  assistant  department  heads  group. 

DETERMINATION   OP  THE  PUNDS   AVAILABLE  POR  DISTRIBUTION 
TICIPANTS : 

^._^^  certain  percentage  of  the  net  profits  of  each  quarter  is  set  aside  for 
distribution  among  participating  employes. 

The  participants  are  divided  into  three  groups,  as  follows:  (1)  the  man- 
agement group,  composed  of  the  executives  of  the  company;  (2)  department 
heads  group;  and  (3)  assistant  department  heads  group. 

The  profit  sharing  funds  are  distributed  among  the  groups  as  follows: 
Group  (1)  receives  25%  of  the  fund;  Group  (2)  receives  20%  of  the  fund 
and  Group  (3)  receives  15%  of  the  fund.  The  remaining  40%  is  distributed 
by  discretion  of  the  Board  of  Directors. 

DETERMINATION   OP   THE   INDIVIDUAL   SHARES: 

Each  participating  employe  shares  in  the  funds  alloted  to  his  group  in 
the  proportion  which  his  salary  bears  to  the  total  salaries  of  the  group. 

PAYMENT  OP  THE  PROFIT  SHARES: 

Profit  shares  are  paid  quarterly  in  cash. 

There  are  no  restrictions  on  the  use  or  payment  of  these  shares. 

PORPEITURE: 

A  member  of  a  profit  sharing  group,  who  leaves  the  service  of  the  com- 
pany during  a  quarterly  period,  does  not  participate  in  the  profits  for  that 
period.  If  he  works  during  the  entire  quarter  and  leaves  the  service  of  the 
company  at  the  end  of  that  quarter  he  is  paid  whatever  profit  share  has  been 
earned. 

ADMINISTRATION : 

The  administration  of  the  plan  rests  with  the  board  of  directors  Thev 
may  modify  the  plan  at  their  discretion.  '  ' 

The  participating  employes  must  accept  the  company's  statement  of  the 
profits. 

Members  of  a  profit  sharing  group  cannot  be  discharged  without  the 
privilege  of  a  hearmg  before  the  two  Vice  Presidents. 

BXASONS  GIVEN  POR  THE  INSTALLATION  OF  THE  PLAN : 

The  installation  of  such  a  plan  was  considered  to  be  good  business.  It 
was  thought  that  it  would  increase  the  efficiency  of  the  plant  and  benefit  both 
the  company  and  participating  employes. 

RESULTS   REPORTED  BY  THE  EMPLOYER: 

It  has  caused  an  increase  in  the  efficiency  of  the  plant  and  has  given  the 
men  an  incentive  to  prevent  waste. 


PRINCIPAL   BUSINESS: 

NUMBER    OP    PEOPLE   EMPLOYED: 

PLAN    WAS    ESTABLISHED    IN: 


Pressed  steel  stampings,  automobile  frames. 

4000  (four  plants). 

1911. 


ELIGIBILITY   TO   PARTICIPATE: 

Eligibility  is  confined  to  members  of  the  executives,  managers  or  oper 
ators  groups.  Membership  in  the  ''pools''  depends  on  performance  "^'^~~ 
members  are  taken  into  the  pools  on  January  1st  and  July  1st. 


New 


EXTENT  OF  PARTICIPATION: 

Approximately  20%  to  25%  of  the  total  number  of  those  employed  par- 
ticipate in  the  plan. 

While  participation  is  confined  to  certain  classes,  those  employed  ar^ 
advanced  to  profit  sharing  groups  as  rapidly  as  possible. 

DETERMINATION  OF  THE  FUNDS  AVAILABLE  FOR  DISTRIBUTION: 

Out  of  the  net  profits,  each  plant  sets  aside  an  amount  sufficient  to  pay  a 
return  of  8%  on  its  invested  capital.  Of  the  remaining  profits,  a  certain  per- 
centage, previously  determined  by  the  board  of  directors,  is  set  aside  for  dis- 
tribution among  the  employes.  This  percentage  averages  about  30%.  The 
plant  retains  50%  of  this  for  its  own  **pool"  and  turns  the  remaining  50% 
into  a  "combined  pool"  formed  by  similar  contributions  from  all  of  the 
plants  of  the  company. 

This  combined  ' '  pool ' '  is  distributed  back  to  the  individual  plants  accord- 
ing to  their  net  worth,  and  is  included  in  their  profit  sharing  funds. 

DETERMINATION  OF  THE  INDIVIDUAL   SHARE: 

The  Company,  in  a  statement  to  its  employes,  makes  this  classification 
of  the  personnel  of  the  organization: 

'*A — owners  who  own  stock; 

B — executives:   the  executive  office  staff,  the  plant  managers,  the  develop- 
ment department  and  the  district  office  staffs; 

C — managers:  assistant  managers  of  plants  and  department  managers; 

D — operators:    department    superintendents,    foremen,    unit   bosses   and    re- 
sponsible clerks; 
E — employes:  those  who  work  under  the  direction  of  operators; 

F — dependents:  we  recognize  the  obligation  due  to  the  dependents  of  those 
whose  entire  activity  is  given  to  this  company." 

It  is  further  stated — "To  owners,  a  normal  return  and,  after  that,  a 
sharing  with  those  who  serve.  To  executives,  managers  and  operators,  fair 
wages  plus  a  share  in  the  profits;  to  employes,  fair  wages  plus  extra  pay  for 
extra  effort;  to  dependents,  protection;  to  all,  opportunity  for  advancement." 

The  profit  sharers  are  formed  into  two  organizations.  The  managers 
form  the  senior,  and  the  operators  the  junior,  organization. 

In  each  plant,  the  money  which  is  to  be  distributed  is  divided  into  two 
equal  parts,  one  of  which  goes  to  the  senior,  and  the  other  to  the  junior,  or- 
ganization. 

The  senior  organization's  money  is  divided  into  shares.  The  plant  man- 
ager, in  conjunction  with  the  plant  executive  committee,  awards  a  certain  num- 
ber of  shares  to  each  member,  the  number  varying  between  members  in  ac- 
cordance with  the  judgment  of  the  manager  and  the  executive  committee. 


Employes*  Incentive  Plans 


I 


\m\ 


The  junior  organization's  share  of  the  profits  is  divided  among  the  in- 
dividual members  on  the  basis  of  their  wages  and  length  of  service.  For  each 
year  of  continuous  service,  a  member  is  given  a  certificate  representing  a  sum 
equal  to  10%  of  his  wages  for  the  year.  This  is  known  as  his  profit  sharing 
principal.  Each  member  participates  in  the  ratio  of  his  principal  to  the  total 
of  such  principal  amounts. 

PAYMENT  OF  THE  PROFIT   SHARES: 

Payment  is  made  in  cash,  semi-annually,  on  July  1st  and  January  Ist. 

FORFEITURE : 

A  member  forfeits  his  profit  sharing  rights  when  he  leaves  the  company. 
The  management  can  remove  a  member  from  a  profit  sharing  group  for 
cauBO* 

ADMINISTRATION   OF   THE   PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan  but  through 
the  medium  of  their  shop  committee  they  can  make  recommendations  re- 
garding modifications  of  the  plan. 

They  are  given  an  opportunity  to  verify  the  company's  statement  of  the 
profits. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  installation  of  such  a  plan  was  believed  to  be  ''good  business."  In 
a  statement  to  employes,  the  president  of  the  company  says:  ** First,  let  me 
state  that  this  profit  sharing  plan  is  a  straight  business  proposition.  Nothing 
is  being  given  away." 

RESULTS   REPORTED  BY   THE  EMPLOYER: 

The  plan  has  stimulated  the  interest  and  efficiency  of  the  employes  and 
has  paid  from  a  business  standpoint.  It  has  been  effective  in  keeping  down 
the  labor  turnover  and  in  creating  satisfactory  labor  relations. 


THE  EAYNEE  COMPANY 

6925  Aetna  Boad 


Cleveland  Limited  Profit  Sharing  Plans 


41 


PRINCIPAL   BUSINESS: 

NUMBER    OF    PEOPLE    EMPLOYED; 

PLAN   WAS   ESTABLISHED  IN: 


Manufacture  of  children's  clothir- 

600-800. 

1914. 


ELIGIBILITY  TO  PARTICIPATE: 

Certain  people  who  are  in  a  position  to  affect  the  profits,  are  given  cer- 
tificates at  the  discretion  of  the  management. 

EXTENT  OF  PARTICIPATION: 

Approximately  6%  of  the  total  number  of  employes  participate  in  the 
plan  and  these  are  for  the  most  part  employes  who  hold  responsible  positions. 

DETERMINATION    OF   THE    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE   PAR- 
TICIPANTS : 

It  depends  upon  the  number  and  value  of  the  profit  sharing  certificates 
which  are  issued. 

DETERMINATION   OF  THE   INDIVIDUAL   SHARE: 

Certain  employes  are  given  a  profit  sharing  certificate  which  entitles  them 
to  an  amount  of  extra  salary  equal  to  the  dividends  on  the  number  of  shares 
of  the  company's  common  stock,  represented  by  the  certificate. 


PAYMENT  OF  THE  PROFIT  SHARE: 

The  equivalent  amount  of  dividends  is  paid  annually  to  the  participants, 
by  cheek,  when  the  regular  dividends  are  paid.  The  right  to  profit  shares 
are  non-transferable. 

FORFEITURE : 

To  receive  a  dividend,  the  employes  must  be  in  the  employ  of  the  com- 
pany at  the  time  the  dividends  are  declared. 

The  certificates  expire  automatically  at  the  end  of  the  year.  The  man- 
agement may  renew  them  at  its  discretion. 

ADMINISTRATION    OF   THE    PLAN: 

The  management  decides  the  questions  of  who  shall  hold  certificates  and 
how  many  shares  of  stock  each  certificate  shall  represent. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

It  was  intended  to  serve  as  a  reward  for  employes  in  responsible  posi- 
tions and  to  stimulate  greater  efficiency. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  management  feels  that  the  plan  has  helped  to  retain  the  participat- 
ing employes. 

The  plan  does  not  apply  to  the  rank  and  file  of  employes,  most  of  whom 
are  women,  as  their  service  is  usually  brief  and  they  are  not  interested  in 
deferred  payments  of  any  kind. 

(Firms  having  similar  plans:  The  Federal  Knitting  Mills  Co.,  The  L.  N. 
Gross  Co.) 


THE  B.  L.  MARBLE  COMPANY 

Bedford,  Ohio 


PRINCIPAL   BUSINESS: 

number    of    PEOPLE    EMPLOYED: 

PLAN   WAS   ESTABLISHED   IN: 


Manufacture  of  office  chairs. 

250. 

1919. 


ELIGIBILITY   TO   PARTICIPATE: 

The  management,  at  its  discretion,  admits  responsible  salaried  employes 
to  participation  in  the  plan. 

EXTENT  OF  PARTICIPATION: 

The  participants,  about  S]/2%  of  the  total  employed,  are  executives  and 
employes  holding  responsible  positions  as  superintendents,  officers  of  the  com- 
pany, office  heads,  etc. 

DETERMINATION    OF   THE   FUNDS    AVAILABLE   FOR   DISTRIBUTION    AMONG   THE   PAR- 
TICIPANTS : 

After  the  necessary  reserves  have  been  provided,  10%  of  the  net  profits 
is  set  aside  as  the  participating  employes'  profit  share. 

DETERMINATION  OF   THE   INDIVIDUAL   SHARE: 

The  profit  sharing  fund  is  pro-rated  among  participating  employes  on  the 
basis  of  their  monthly  wages. 


M 

II 


iilll 


42 


Employes'  Incentive  Flans 


Cleveland  Limited  Profit  Sharing  Plans 


43 


PAYMENT  OF  THE  PROFIT  SHARE: 

The  profit  shares  are  paid  in  cash  at  the  end  of  each  month. 

porfeittjre: 

The  profit  sharing  privilege  can  be  forfeited  only  by  leaving  the  service. 
Sickness  has  no  effect  on  the  right  to  participate. 

ADMINISTRATION   OF   THE   PLAN: 

By  the  management. 

SEASONS  GIVEN  FOR  INSTALLATION  OP  THE  PLAN: 

It  was  desired  to  increase  the  efficiency  and  at  the  same  time  obviate  the 
necessity  of  raising  salaries 

BESULTS  REPORTED  BY  THE  EMPLOYER: 

There  is  a  greater  effort  on  the  part  of  everyone. 

(Firms  having  similar  plans:    The  Enamel  Products  Co.;  Potter,  Teare 
ft  Co.) 


THE  MARSHALL  DRUG  COMPANY 

Public  Square 


PRINCIPAL  BUSINESS:  Maintain  a  chain  of  retail  drug  stores. 

number   of   PEOPLE   EMPLOYED:         300-400. 
PLAN  WAS  ESTABLISHED  IN:  1903. 

ELIGIBILITY   TO   PARTICIPATE: 

Managers  and  assistant  managers  only  are  eligible  to  participate. 

SZTSNT  OP  PARTICIPATION: 

Between  12%  and  15%  of  the  total  number  employed,  participate  in  the 

DETERMINATION    OP   THE   FUNDS    AVAILABLE    FOR   DISTRIBUTION    AMONG   THE    PAR- 
TICIPANTS : 

Ten  per  cent,  of  the  net  profits  of  each  store  plus  20%  of  the  gain  in 
net  profits  over  those  of  the  previous  year  are  given  to  each  store  manager. 
Five  per  cent,  of  the  net  profits  of  the  store  go  to  the  assistant  manager.  The 
manager  may  divide  the  20%  of  the  gain  in  net  profits  with  his  assistant  at 
his  discretion. 

DETERMINATION   OF   THE  INDIVIDUAL  SHARE: 

As  stated  above. 

PAYMENT  OP  THE  PROFIT  SHARE: 

The  profit  share  is  paid  in  cash  at  the  end  of  the  year.  The  profit  shar- 
ing rights  are  non-assignable. 

FORFEITURE: 

There  is  no  forfeiture  except  in  case  of  discharge. 

ADMINISTRATION  OF  THE  PLAN: 

The  participants  can  verify  the  company's  statement  as  to  the  profits. 
The  plan  may  be  modified  by  the  management  at  will. 


REASONS  GIVEN   FOR  INSTALLATION  OF  THE  PLAN: 

The  management  wished  to  create  in  its  valuable  employes  a  more  per- 
sonal interest  in  the  business. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  is  believed  that  the  plan  has  increased  the  efficiency  of  the  participants, 
and  has  promoted  a  closer  relationship  between  them  and  the  management. 


NATIONAL  WOOLEN  COMPANY 

3131  West  33rd  Street 


PRINCIPAL   business: 

NUMBER    OF    PEOPLE    EMPLOYED: 

PLAN   WAS  ESTABLISHED  IN: 

ELIGIBILITY   TO   PARTICIPATE: 

Participation   is   confined 
served  at  least  one  year. 


Rework  wooL 

350. 

1918. 


to   officers   and   salaried   employes   who   have 


EXTENT   OF  PARTICIPATION: 

Approximately  12%  of  the  total  number  of  employes  participate. 

DETERMINATION    OF    THE    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE    PAR- 
TICIPANTS : 

An  amount,  sufficient  to  pay  a  dividend  of  6%  on  the  preferred  stock  and 
8%  on  the  common  stock  and  surplus  of  the  company,  is  first  set  aside  out  of 
net  profits.  Of  the  remaining  profits,  5%  of  the  first  $25,000,  10%  of  the  next 
$25,000,  20%  of  the  next  $25,000,  and  25%  of  the  balance  of  the  profits  are 
set  aside  for  distribution  among  the  participating  employes. 

The  maximum  amount  of  profits,  which  can  be  distributed,  is  fixed  at  $40,- 
000,  except  that  the  board  of  directors  may  authorize  the  distribution  of  an 
additional  $10,000.00. 

DETERMINATION   OP  THE  INDIVIDUAL   SHARE: 

The  employes'  share  of  the  profits  is  distributed  among  participating  em- 
ployes on  the  basis  of  their  salary  and  length  of  service.  An  employe,  who 
has  been  in  the  service  for  five  years  or  more,  participates  on  the  basis  of  his 
full  salary;  4  years,  on  the  basis  of  90%  of  his  salary;  3  years,  on  the  basia 
of  80%;  2  years,  on  the  basis  of  70%,  and  one  year  on  the  basis  of  60%. 

The  individual  employe  shares  in  the  profit  sharing  fund  in  the  propor- 
tion which  his  salary  basis  bears  to  the  total  of  the  salary  bases. 

The  limit  of  $40,000.00  on  the  profit  sharing  fund  places  a  limit  on  the 
amount  which  each  individual  employe  may  receive  as  a  profit  share. 

PAYMENT  OF  THE  PROFIT  SHARE: 

The  profit  shares  are  paid,  in  cash,  in  December  and  May. 

FORFEITURE : 

Employes,  leaving  the  service  voluntarily,  forfeit  their  share  of  the  profits 
for  the  current  profit  sharing  period.  If  they  are  discharged,  they  do  not  for- 
feit their  share.  Sums  forfeited  are  distributed  among  the  remaining  par- 
ticipants. Sickness,  or  layoff  does  not  affect  the  right  to  participate,  except 
that,  by  earning  less  wages  during  the  profit  sharing  period,  the  employe  would 
receive  a  smaller  profit  share. 

ADMINISTRATION  OF  THE  PLAN: 

The  employes  have  a  voice  in  the  administration  of  the  plan,  and  may 
verify  the  company's  statement  of  the  profits  if  they  so  desire. 


I  flnff 


44 


Mmployea*  Incentive  Flans 


Cleveland  Limited  Profit  Sharing  Plans 


45 


BXASOKS  GIVIN   FOR  INSTALLATION  OP  THE  PLAN: 

It  was  installed  as  a  means  of  compensating  for  the  increase  in  the  cost 
Of  living,  and  as  an  incentive  to  employes  to  continue  in  the  service  of  the 
eompanj. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  improved  the  relations  existing  between  the  participatinj? 
employes  and  the  company.  It  is  felt  that  the  plan  has  been  in^rumental  in 
retaining  the  more  valuable  employes. 

(Firm  having  similar  plan:     The  Austin  Co.) 


EELIABLE  STOVE  COMPANY 

1787  E.  40th  St. 


FMNCIPAL  BUSINESS :     Manufacture  of  stoves,  ranges,  gasburning  appliances. 

NUMBER   OF   PEOPLE   EMPLOYED:         320-500.  FpiiauteB. 

PLAN  WAS  ESTABLISHED  IN:  1910— amended  in  January,  1920. 

ELIGIBILITY   TO  PARTICIPATE: 

Employes  who  receive  a  salary  less  than  $1200.00  per  year,  or  who  re- 
ceive commissions  on  sales  or  payment  on  piecework,  are  not  entitled  to  par- 
ticipate  m  the  plan.  ^  ^  par 

Employes  whose  full  time  is  not  given  to  the  company  or  who  are  em- 
ployed  m  manual  labor,  which  does  not  involve  the  oversight  of  others  are 
not  entitled  to  participate.  * 

Factory  foremen,  warehouse  employes,  assistant  foremen,  engineers,  ship- 
ping  clerks  and  office  employes  are  eligible.  ^ 

EXTENT  OF  PARTICIPATION: 

r.io^^^^i*''^**®]^  1?^^   ""^  *^®  ^""^^  '''''^^^   employed,   participate  in   the 
plan.    They  are  for  the  most  part  employes  who  hold  responsible  positions. 

DETERMINATION   OP   THE   FUNDS    AVAILABLE    FOR   DISTRIBUTION    AMONG    THE    PAR- 
TICIPANTS : 

-n^itf*^'  T^^^  reserves  have  been  provided,  and  6%  on  the  capital  and 
^^Zr^  ^f.^^  *''^.  ^^>  ""i  ***«  remaining  profits  is  then  set  aside  for 
distribution  If  the  participation  fund  for  any  year  does  not  exceed  $5  000  00 
such  amount  is  not  credited  to  the  participants,  but  is  held  by  the  Treasurer 
as  midivided  profits  and  an  equal  amount  is  added  to  subsequent  participation 
funds  until  such  funds  exceed  $5,000.00.  ^ip'nwn 

DETERMINATION   OF  THE  INDIVIDUAL   SHARE: 

The  employes'  share  of  the  profits  is  distributed  among  the  eligible  em- 
ployes, on  the  ba«s  of  their  salary,  less  $1,000.00.  Each  employe  shares  in 
the  proportion  which  his  salary  above  $1,000.00  bears  to  the  total  of  such 
amounts  for  aU  of  the  participating  employes. 

PAYMENT  OF  THE  PROFIT  SHARES: 

♦n  iJJ"! FlfK'^u''^  ^\^  P^^  ^T^7'  They  are  held  until  the  accumulation 
to  the  credit  of  the  employe  is  sufficient  to  purchase  for  his  account  one  share 
of  the  stock  of  the  company  for  each  $100.00  of  his  yearly  salary.  After  this 
stock  has  been  completely  purchased,  the  employe's  profit  shares  are  paid  to 
mm  in  cash.  ^ 

Profit  sharing  rights  are  non-assignable. 


FORFEITURE : 

Employes  who  leave  the  company,  forfeit  their  right  to  a  share  of  the 
profits  for  the  profit  sharing  period. 

Sickness,  death,  or  layoff,  has  no  effect  on  the  right  to  participate. 

ADMINISTRATION  OF  THE  PLAN: 

The  employes  have  no  voice  in  the  administration  of  the  plan. 

STOCK  PURCHASING  FEATURES: 

The  company  holds  each  employe's  profit  share  until  the  accumulation  is 
sufficient  to  purchase  one  share  of  the  company's  stock  for  each  $100  of  the 
employe's  annual  salary. 

Interest  at  6%  is  paid  on  amounts  held  for  the  purchase  of  stock.  The 
stock  certificates  are  turned  over  to  the  employe  when  fully  paid. 

REASONS  GIVEN   FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  plan  was  installed  to  develop  a  spirit  of  cooperation  among  those 
employes  who  are  in  a  position  to  influence  the  profits  of  the  company. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  creates  a  desire  to  get  into  the  supervisory  class,  and  for  this 
reason,  it  stimulates  the  employe's  interest  in  his  work  and  probably  tends  to 
increase  his  efficiency. 

Inasmuch  as  a  great  many  employes  have  been  with  the  company  for  a 
considerable  period  of  time,  it  is  difficult  to  determine  the  effect  which  the 
plan  has  had  in  stabilizing  the  working  force. 

The  plan  was  originally  extended  to  all  employes  earning  $1,200.00  or 
more  per  year,  but  in  the  case  of  factory  employes  it  was  not  successful  owing 
to  the  fact  that  they  were  not  able  to  understand  the  factors  influencing  profits 
and  the  method  of  computing  the  profit  share.  They  were  dissatisfied  when 
the  profits  were  small,  and  could  not  understand  the  fluctuation  in  the  profits 
which  took  place  from  year  to  year. 

For  this  reason  the  plan  was  amended  tO  exclude  those  employed  in 
manual  labor  and  to  include  only  those  whose  duties  involve  the  oversight  of 
others,  providing  they  earn  more  than  $1,200.00  per  year. 

(Firms  having  similar  plans:  The  Best  Foundry  Co.;  The  Dangler 
Stove  Co.) 


SUMMARY  OF  LIMITED  PROFIT  SHARING  PLANS 

The  Cleveland  plans,  classified  by  the  committee  as  limited  profit  sharing, 
including  those  described  above,  may  be  summarized  as  follows: 


Plan  No.  Type  of  Business 

1  Manufacturer 

2  Betail 

3  Manufacturer 

4  Manufacturer 

5  Manufacturer 
8  Manufacturer 

7  Manufacturer 

8  Manufacturer 

9  Wholesale 

10  Manufacturer 

11  Wholesale 

12  Manufacturer   and  Wholesale 

13  Betail 

14  Manufacturer 

15  Manufacturer 

16  Manufacturer 

17  Professional  Service  Company 


Plan  Installed  in 

1919 
1903 
1914 
1910 
1918 
1919 
1917 
1911 
Prior  to  1913 
1919 
1911 

•  •  •  • 

1914 
1911 
1914 
1916 
1914 


Nwmber 
Employed 

1,201 

350 

700 

320 

350 

250 

275 

4,000 

90 

121 
80 

•  •  •  • 

1,700 

700 

650 

500 
4,000 


4$ 


Employes'  Incentive  Plans 


Cleveland  Limited  Profit  Sharing  Plans 


47 


the  pliws^aU^^  statistics  show  the  various  groups  of  business  into  which 


i 


Groups 

Professional  Service 
Betail 
Wholesale 
Manufacturing 


Number  of  Plans 

1 

2 

3 

U 


positUm    ™*''**'^*^  ®^  *^®^  P^^^  *^®  ^^^  *o  reward  people  in  responsible 

•      i^^®*?"^rij^  **^^®  ^^^^  *^**  ^^^^  0^  t^e  plans  are  found  in  firms  hav- 
ing less  than  500  employes: 


Number  of  employes 

50-  100 

101-  250 

251-  500 

501-1000 

over  1000 


Number  of  plans 
2 

8 


ELIGIBILITY: 

^lo^P^"",?*®  *^®  fact  that  most  of  these  plans  are  intended  to  reward  em- 
ployes holding  responsible  positions,  the  decision  as  to  who  are  eUgible  usually 
rests  with  the  management.     This  is  true  in  eleven  plans. 

In  two  plans,  participation  is  confined  to  a  certain  general  class  of  em- 
ployes, such  as  salespeople,  office  employes,  etc. 

Tm«4  Jo^o  ^^^%  ^K?""'?®  *****  .*"  e°iployes,  who  occupy  certain  designated 
positions,  are  eligible  to  participate.  Another  plan  provides  that  the  employe, 
to  be  eligible,  must  earn  a  certain  minimum  salary,  and  must  not  receive  a 
commission  on  sales  or  any  pay  for  piecework,  or  be  engaged  in  manual  labor 
not  involvmg  oversight  of  others. 

Length  of  service  is  a  condition  of  eligibiUty  in  only  one  case.  This  plan 
provides  that  the  employe  must  have  had  at  least  one  year  of  service  with 
the  company.  v«   "xi,** 


EXTENT  OF  PARTICIPATION  AND  THE  SIZE 
PERCENTAGE    OF    EMPLOYEES    WAGES 
BOLL  PAID  OUT  AS  PROFIT  SHARES: 

%  of  total  number  of  em- 
Firm  No.  ployes  who  participate — 


OP  THE  PROFIT  SHARE  EXPRESSED  AS  A 
AND   AS    A   PERCENTAGE   OF   TOTAL   PAY- 


1 

2 
3 
4 
ff 

6 

7 

8 

8 

10 

11 

12 

13 

14 

15 

16 

17 


11% 

12%-15% 


70 
10% 
12% 

8%-  9% 
12% 

20%-25% 
25% 
10% 

5% 

•   •  •   • 

-1% 

15% 
4% 

10% 
-1% 


%  of  icages  re- 
ceived as  profit 
shares 

15%-25% 
25%-50% 
10%-40% 
6%-  7% 
40%-50% 
50% 


%  of  total  payroll 
paid  out  as  profit 
shares 

-1% 

«  •  •  • 

-1% 

-1% 

11% 


MOTK:— 'The  minus  sign  indicates  ''less 


16%-23% 
200% -300% 
30% 
300% 

25%*100% 
40% 

io%-i5% 

20%-30% 
than." 


-1% 
5% 


In  the  majority  of  cases,  the  number  of  participating  employes  is  between 
6%  and  15%  of  the  total  number  employed.  This  is  because  these  plans  are 
used  to  reward  a  limited  number  of  employes. 


Number  of  plans 

2 
2 
5 
5 


Percent,  of  total  number  of 
employes  who  participate 

Less  than  1% 

1%-  5% 

6%-10% 
11%-15% 
16%-20% 
21%-25% 

The  percentage  of  wages,  received  as  a  profit  share,  is  much  larger  in  the 
case  of  limited  profit  sharing  than  in  the  case  of  profit  sharing.  This  is  due 
to  the  fact  that  a  smaller  number  of  employes  participate  and  they  are,  in 
general,  the  more  important  employes.  The  following  table  shows  the  per- 
centage of  their  wages,  which  the  employes  receive  as  a  profit  share: 


Percent,  of  totaX 
number  of  pUuM 

12.5  % 
12.5  % 
31.25% 
31.25% 

12.5  % 


Percent,  of  wages  received 
as  a  profit  share 

5-10% 
11-20 
21-30 
31-40 
41-50 
Over  50% 


Number  of  plans 

1 
1 
4 
2 
2 
3 


Percent,  of  total 
number  of  plans 

7.7 

7.7 
30.7 
15.3 
15.3 
23.1 


DETERMINATION  OF  THE  FUNDS  AVAILABLE  FOR  DISTRIBUTION: 

The  rate  of  return,  which  is  considered  fair  for  the  use  of  capital,  varies 
between  the  different  firms.  The  majority  of  the  firms  consider  6%  on  the 
capital  invested  and  surplus  as  a  fair  return.  In  a  few  plans,  a  rate  of  HJo 
is  specified.     Very  few  plans  require  a  return  above  8%.  ^.  .  .,    ^  ;j 

In  many  instances,  the  share  of  the  profits  which  should  be  distributed 
among  the  participating  employes  is  a  definite  percentage  of  the  net  profits; 
in  three  cases  it  is  10%;  and  in  one  case  it  is  30%  of  the  net  profits. 

One  firm  specifies  that  the  net  profits,  over  and  above  a  fair  return  for 
the  use  of  capital,  shall  be  divided  between  the  stockholders  and  the  employes 
in  the  ratio  of  the  capital  and  surplus  to  the  yearly  payroU. 

A  few  concerns  distribute  among  employes,  a  percentage  of  the  protits 
which  increases  with  increasing  profits.  In  one  case  the  scale  is  as  follows: 
5%  of  the  first  $25,000  of  net  profits  above  a  stated  rate  of  interest  on  the 
investment  is  distributed  among  the  employes.  After  this,  10%  of  the  next 
$25,000,  20%  of  the  next  $25,000,  and  25%  of  aU  the  net  profits  above  these 
amounts  is  distributed.     There  is  a  limit  of  $40,000  to  the  amount  of  profit 

which  may  be  distributed.  ^x.  t,  innf    ^t 

One  concern,  operating  a  chain  of  retail  stores,  provides  that  10%  of 
the  net  profits  of  each  store  shall  go  to  the  manager,  5%  of  the  net  profits 
shall  go  to  the  assistant  manager,  and  20%  of  the  gain  in  net  profits  over 
the  preceding  year  goes  to  the  manager,  who  may  share  this  with  his  assistant 

at  his  discretion.  .  ,         .  .  v^  »i.„,« 

Another  concern  divides  its  participating  employes  into  groups  who  share 
in  the  profit  sharing  funds  as  foUows:  Group  1,  the  management  group, 
25%:  Group  2,  department  heads,  20%,  and  Group  3,  assistant  department 
heads,  15%  of  the  funds.  The  remaining  40%  of  the  profit  sharmg  funds 
is  disposed  of  by  the  board  of  directors  of  the  company  in  accordance  with 

its  own  discretion.  .         ,  ^         ^  .  1 

In  three  instances,  profit  sharing  certificates  are  issued  to  certam  ©mploy®8- 
The  amount  distributed  depends  upon  the  number  of  shares  of  stock  which 
these  certificates  represent.  They  participate  in  the  profits  at  the  same  rate 
that  dividends  are  paid  on  the  common  stock. 


Employes*  Incentive  Plans 


* 


BOfC^/ t^^^^AT^"i'  "'"'<='' operates  a  number  of  plants,  has  a  plan  whereby 
Kstritutl^  1^'  "'f  P"""*'  *^*'"""«  *"  distribution,  goes^^to  a  fSj 

This  combined  fid  Ts^^r^distribXrt  t^  th."*!?*'^^^    ^^T  *•'  »*  *■>«  P'»°t«- 
S-ntrThirnho  JV  "-S^^"?"  "oe?1nrthentn';'l?.':rsh*a^^^^^^ 

rd^jiorin-rttr'prtto  -r^ZTZeT ''-''  -^ ''''-'  '"'^''™™^^ 

profite''m« ^^'V1*.h'  •'""fK  P;""?**"  *''**  »  <="**'"  percentage  of  the  net 
di^torr^  ^  '"  **'*  •'™"'*™  **  «■«  discretion  of  the  board  of 

BKTERMINATION   Or   THE  INDIVIDUAI,  SHARE- 

«cipIS.stn?hTU:  o'*/teir''^a"r1o/'"'Tw„":.h'"'*?"*"''   ""r^  *"«  P"' 
cent.^  of  p,o«ts  to  J  ^^.TZ,.oJZ\:i^/:^l.r:^,'-£,^^^ 

ticip^  ^.Zr^i^  4e';r.  IS^r/unt"^'  tCSo^^le'^tarer 
of  their  salanes,  which  increase  with  length   of  service  as   fnltnw.  -      Ti?„  ' 

Sari^^twT^eaT'rZ'  '^^  °"^  ^*"'./"  ^  th^'asis'of"' 0%-of?h:" 

o^ro";  ioovro7thei?ii/a''i:srs/'''*™'  '"^'■'  '""^  ^'"'"' ««%' «-» fi-  yo- 

«u..i!^  *5*  ""^  "'  P™"'  sharing  certificates,  the  amount  which  the  Darticinant 

^r7siLWhin:r*ti'«c:r^^  °'  '^-'-^ »'  --»■"  ^'--^  -^  ^-iTn^! 

the  ^e:''ftrLt"LSf  .tifolr^tytereiv^  l^rTl,Tl\\^' 
gross  profits,  less  the  amount  which  is  ailowed  To  rras'^dr^wingVcount 

One  firm  divides  its  profit  sharing  emDloves  into  fwn  «rn„r^o      mu 
group,  consisting  of  the  higher  executLsTceive    fc  ^taif S^  oTth" 

profit  sharing  funds  which  is  divided  into  shares.    Each  mL^ber  of  the  ^roun 
receives  a  certain   number  of  shares,   fixed  by  the  pla^  manager  ^fZ 
executive  committee  of  the  plant.     The  members  of  the  j^iZ^freanTzation 
composed  of  minor  executives,  share  in  funds  for  their  group  on  the  bast  of 
their  wages  for  the  current  period.  ^    ^  ^^  ^^ 

PAYMENT   OF  PROFIT   SHARES: 

/OX  '^u®  following  table  shows  for  the  various  plans,  (1)   how  thev  are  naiil 


Plan  No.    How  Paid 


1 

Cash 

2 

Cash 

3 

Check 

4 

Cash 

5 

Cash 

6 

Cash 

7 

Cash 

8 

Cash 

9 

Cash 

When 

Quarterly 

Yearly 

Yearly 

Yearly 

Semi-annual'v 

Monthly 

Yearly 

Semi-annually 

Yearly 


Conditions  on  payment  of  profit  share 

None 
None 
None 
None 
None 
None 
None 
None 
None 


10 


Cleveland  Limited  Profit  Sharing  Plans 


None 


49 


11 

12 
13 
14 

15 
16 
17 


Cash 
Cash 

Christmas, 
New  Year 's 
and  balance 
at  end  of 
fiscal  year 
Yearly 

•   ■  •  • 

Cash 
Cash  or 

Yearly 
stock  Yearly 

Cash 
Cash 
Cash 

Yearly 
Yearly 
Yearly 

Deposited  to  employes*  credit. 
Draws  interest  at  six  per  cent. 


None 

Held  for  one  year  unless  employe 
holds  stock  to  value  of  his  salary. 
None 
None 
None 


The  data  show  that  fourteen  concerns  pay  profit  shares  in  cash.  One 
concern  pays  the  shares  by  check,  and  another  pays  by  cash  or  stock,  de- 
pending upon  the  amount  of  stock  which  the  participating  employe  owns.  In 
the  latter  case,  it  is  required  thut  each  participant  owns  a  certain  number  of 
shares  of  stock,  depending  upon  the  amount  of  his  salary. 

The  following  table  summarizes  the  periods  in  which  the  profit  shares 
are  paid.  The  majority  of  firms  pay  their  profit  shares  annually.  In  most 
cases  accounting  reasons  influence  the  time  of  payment. 


When  Paid 

Monthly 

Quarterly 

Semi-annually 

Yearly 

Miscellaneous 


Numlter  of  Plans 

1 
1 
2 
11 
1 


FORFEITURE : 

In  most  of  the  plans,  the  conditions  of  forfeiture  are  few  and  simple.  In 
every  case,  sickness,  death  or  layoff  has  no  effect  upon  the  right  to  participate 
provide  that  discharge  for  cause  is  ground  for  forfeiture.  In  three  cases, 
forfeiture  rests  entirely  with  the  discretion  of  the  management.  In  almost 
every  case  sickness,  death  or  layoff  has  no  effect  upon  the  right  to  participate 
m  the  profits  for  the  profit  sharing  period. 

One  firm  provides  that,  if  an  employe  leaves  the  service  voluntarily,  he 
forfeits  his  right  to  the  profit  share,  but  if  he  is  discharged  he  receives  it. 

In  the  majority  of  cases,  there  is  no  provision  for  the  disposition  of  for- 
feited profit  shares.  In  only  two  cases,  is  it  stated  that  the  forfeited  sums 
shall  be  distributed  among  the  remaining  employes. 

In  the  case  of  profit  sharing  certificates,  it  is  usually  provided  that  the 
agreement  shall  expire  automatically  at  the  end  of  the  current  year,  and  shall 
be  renewed  for  the  ensuing  year  at  the  discretion  of  the  management. 

ADMINISTRATION : 

In  fourteen  plans,  the  participating  employes  have  no  voice  in  their  ad- 
ministration.    In  one  plan,  however,  the  participants  have  a  voice. 

The  employes  are  permitted  to  verify  the  company's  statement  of  the 
profits  in  only  two  instances. 

In  eight  cases,  the  management  may  modify  the  profit  sharing  agreement 
at  will.    In  three,  they  may  modify  it  at  the  end  of  the  current  year. 

One  plan  has  an  interesting  clause  which  provides  that  members  of  profit 
sharing  groups  cannot  be  discharged  until  they  have  had  a  hearing  before 
the  two  vice-presidents  of  the  company. 

REASONS   FOR  THE  INSTALLATION  OF  THE   PLANS: 

The  principal  object  is  to  increase  efficiency  of  employes  holding  respon- 
sible positions.     This  reason  is  given  in  eight  of  the  cases  reported. 


IL 


I 


m 


Employes*  Incentive  Plans 


1 1 


The  rewarding  of  faithful  or  responsible  employes  is  also  an  important 
object.  In  five  instances,  this  reason  has  been  given  for  the  installation  of 
the  plan. 

In  five  cases,  the  installation  is  the  result  of  a  desire  to  develop  the  co- 
operation or  loyalty  of  the  participating  employes. 

Two  firms  made  the  installation  because  they  thought  it  was  **good 
business/'  and  two  others,  in  order  to  hold  certain  valuable  employes.  In 
no  case,  are  the  motives,  which  have  prompted  employers  to  install  profit  shar- 
ing, stated  to  be  altruistic. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

A  summary  of  the  results  which  have  been  obtained  by  the  various  plans, 
indicates  that  they  have  generally  been  successful.  In  nine  cases,  they  have 
resulted  in  an  increase  in  efficiency.  In  five  more,  they  have  been  instru- 
mental in  holding  valuable  employes  or  in  decreasing  the  labor  turnover.  A 
decided  improvement  in  the  relations,  existing  between  the  participating  em- 
ployes and  the  management,  is  reported  in  five  instances.  There  are  only  three 
firms  which  report  that  there  have  been  no  noticeable  results.  These  firms, 
however,  do  not  report  that  the  plans  have  caused  any  unrest. 


CLEVELAND  STOCK  SALES  PLANS 

TYPES 

1.  American  Steel  &  Wire  Company 

24.  The  Cleveland  Hardware  Company 

3.  The  Ohio  Bell  Telephone  Company 

4.  The  Cleveland  Worsted  Mills 

5.  The  National  Acme  Company 

6.  The  Penton  Publishing  Company 

7.  The  Euss  Manufacturing  Company 

8.  The  Standard  Parts  Company 

9.  FuUer  and  Smith. 

SUMMARY 


I  ll 


"» 


Cleveland  Stock  Sales  Plans 


53 


AMERICAN  STEEL  AND  WIRE  COMPANY 

Western  Eeserve  Building 


PBINCIPAL  business:  Iron  and  steel,  billets,  rods,  wire,  wire  goods 

and  nails. 

NUMBER  OF  PEOPLE  EMPLOYED:    30,000   (9200  in  Cleveland). 

PLAN  WAS  ESTABLISHED  IN:  1903 — the  agreement  is  revised  yearly  in  ac- 

cordance with  the  market  price  of  the  stock. 

ELIGIBILITY   TO  PARTICIPATE: 

All  officers  and  employes  are  eligible  to  participate. 

EXTENT  OF  PARTICIPATION: 

On  December  31,  1918,  more  than  36,646  employes  of  the  United  States 
Steel  Corporation  were  stockholders  under  the  plan.  Their  aggregate  hold- 
ings amounted  to  more  than  143,528  shares  of  stock.  It  is  impossible  to  ascer- 
tain how  many  employes,  in  addition  to  those  still  receiving  the  special  bene- 
fits, hold  stock  for  which  these  special  benefits  have  ceased,  but  it  is  believed 
that  their  numbers  would  greatly  increase  the  figure  here  given. 


CONDITIONS  AND  TERMS  OP  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

In  1919,  employes  were  permitted  to  subscribe  for  the  common  stock  of 
the  United  States  Steel  Corporation  at  the  price  of  $92.00  per  share.  The 
number  of  shares  for  which  an  employe  might  subscribe  varied  with  the  size 
of  his  salary  or  earnings  in  accordance  with  the  following  schedule: 


Employes 
salaries 

J     690.00 

690.01 

1,533.34 

2,146.67 

3,450.01 

4,216.67 

4,983.34 

6,900.01 

7,820.01 

8,740.01 

9,660.01 

13,225.01 

14,375.01 

15,525.01 

16,675.01 

17,825.01 

18,975.01 


receiving  annual 
or  earnings  of 

or  less 

to  $  1,533.33 

to  2,146.66 

to  3,450.00 

to  4,216.66 

to  4,983.33 

to  6,900.00 

to  7,820.00 

to  8,740.00 

to  9,660.00 

to  13,225.00 

to  14,375.00 

to  15,525.00 

to  16,675.00 

to  17,825.00 

to  18,975.00 

to  32,200.00 


Cottld  subscribe  for 

a  maximum  number  of 

1 

share 

2 

shares 

3 

shares 

4 

shares 

5 

shares 

6 

shares 

7 

shares 

8 

shares 

9 

shares 

10 

shares 

11 

shares 

12 

shares 

13 

shares 

14 

shares 

15 

shares 

16 

shares 

17 

shares 

Payment  of  subscriptions  is  made  in  monthly  installments  of  not  less 
than  $2.00  per  share  or  more  than  one-quarter  of  any  one  month's  salary. 
Installments,  exceeding  the  minimum,  must  be  in  even  dollars.  Payments  for 
the  stock  must  be  completed  within  three  years  from  the  date  of  purchase. 

Interest  at  5%  is  charged  on  deferred  payments. 

Until  payment  of  the  subscriptions  has  been  completed,  any  dividends, 
paid  on  the  stock,  will  be  credited  to  the  account  of  the  subscriber  as  part  of 
his  payment.  After  the  stock  has  been  issued  to  the  subscriber,  further  divi- 
dends go  directly  to  him. 


54 


Employes'  Incentive  Plans 


I 


Subscriptioiis  are  canceUed  for  the  following  reasons: 

1.  By  request  of  the  subscriber. 

2.  By  voluntarily  leaving  the  service. 

3.  By  discharge. 

4.  Failure  on  part  of  employe  to  resume  employment  when  requested. 
6.   By  discontinuing  payments,  without  the  consent  of  the  corporation, 

for  three  consecutive  months. 

When  a  subscription  ia  cancelled,  the  amounts  paid  in  are  returned  to  the 
irabscriber,  together  with  interest  at  6%  per  annum.  No  credit  is  given  for 
dividends  or  other  benefits. 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS  STOCK: 

When  the  stock  is  fully  paid,  the  employe  may  dispose  of  it  as  he  sees 
fit,  but  if  the  employe  keeps  the  stock  and  exhibits  the  certificate  to  the 
company  treasurer  each  January  for  five  years  after  date  of  purchase,  together 
with  a  statement  from  a  proper  official  that  he  has  been  continuously  in  the 
employe  of  the  company  during  the  preceding  year,  he  receives  a  special 
cash  payment  of  $5.00  per  share  for  each  share  of  stock,  or  a  total  of  $25.00 
during  the  five  years.  If  at  the  end  of  any  year,  the  subscription  is  not  paid 
up,  this  special  benefit  of  $5.00  per  share  is  credited  as  a  payment  on  the 
stock. 

The  special  benefits  are  forfeited  when  during  the  five  year  period  a 
subscriber  sells  his  stock,  voluntarily  leaves  the  service,  is  discharged  for 
cause  or  fails  to  resume  employment  when  requested.  Benefits  so  forfeited 
go  into  a  fund  earning  5%  interest.  At  the  end  of  each  five  year  period,  this 
fund  is  divided  pro  rata  among  the  subscribers,  who  have  retained  their 
stock.  This  additional  compensation  averaged  $16.05  per  share  during  the 
past  12  years. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OP  THE  PLAN: 

To  enable  employes  to  buy,  imder  a  contract  with  the  corporation,  one  or 
more  shares  of  stock  each  year  upon  terms,  offering  a  safer  and  more  profit- 
able investment,  than  they  could  possibly  find  for  their  savings  elsewhere. 

EESUIiTS   REPORTED   BY   THE  EMPLOYER: 

Not  stated. 

(Firm  having  similar  plan:  The  Globe  Machine  &  Stamping  Co.) 


THE  CLEVELAND  HARDWARE  COMPANY 

4518  Lakeside  Avenue 


PRINCIPAL  business: 

number   op  PEOPLE   EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


ELIGIBELITT  TO  PAETICIPATl: 


Manufacture  vehicle  hardware  and  forgines. 
2500.  * 

1912  and  was  superseded  by  revised  plans  in 
1918  and  1919.  The  foUowing  plan  will  be 
in  force  for  the  year  1920. 


Executives  and  employes  in  responsible  positions  are  permitted  to  par- 
ticipate in  the  plan  at  the  discretion  of  the  executive  committee  of  the  com- 
pany. 

EXTENT  OP  PARTICIPATION: 

By  reason  of  the  limited  number  who  are  eligible,  participation  in  the 
plan  is  small.  The  number  of  employes  participating  is  now  about  3%  of  the 
total  number  employed. 


Cleveland  Stock  Sales  Plans  55 

CONDITIONS  AND  TERMS  OP  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

The  company  and  the  employe  sign  a  contract  for  the  sale  of  a  certain 
number  of  shares  of  the  capital  stock  of  the  company  to  the  employe  on  the 
terms  outlined  below. 

(1)  The  Stock  Certificates  are  held  by  the  company  for  a  period 
of  five  years  to  insure  the  full  performance  of  the  contract.  During  this 
period  the  employe  enjoys  the  rights  of  a  stockholder,  except  as  limited 
by  the  contract. 

(2)  The  purchase  price  of  the  stock  is  determined  for  each  individual 
sale  at  the  time  the  contract  of  sale  is  drawn. 

Payment  for  the  stock  is  made  in  ten  equal  semi-annual  installments. 
The  unpaid  balance  of  the  purchase  price  draws  interest  at   6%, 
payable  with  the  installments  of  the  principaL 

(3)  All  stock  dividends  are  held  by  the  company  for  the  five  year 
period. 

(4)  The  company  may  rescind  the  contract. 

(a)  When  at  any  time  within  the  five  year  period,  the  employe 
leaves  the  service  of  the  company. 

(b)  When  the  employe  defaults  in  any  payments  of  principal 
or  interest  and  the  default  continues  for  a  period  of  thirty  days. 

(c)  Upon  any  other  grounds  satisfactory  to  the  company,  with- 
out notice. 

(5)  In  case  the  company  rescinds  the  contract  upon  grounds  (a) 
and  (b),  it  is  required  to  pay  to  the  employe  within  30  days  of  the 
date  of  such  action  all  principal  payments  made  by  him. 

In  case  the  company  rescinds  the  contract  on  ground  (c),  it  may 
issue  to  the  employe,  at  its  option,  as  many  shares  of  stock  as  are  fully 
paid  together  with  the  proportionate  amount  of  any  extra  stock  or  cash 
dividend  which  are  then  declared  and  due.  All  other  principal  sums 
which  have  been  paid  to  the  company  are  returned  to  the  employe  in  cash. 

(6)  In  the  event  of  the  death  of  the  employe,  his  legal  representa- 
tives acquire  only  such  rights  as  are  reserved  to  the  employes,  upon  the 
election  of  the  company  to  rescind  the  contract  on  the  ground  that  em- 
ployment has  ended. 

(7)  The  contract  is  non-assignable. 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS   STOCK: 

There  are  no  inducements  for  the  employe  to  retain  his  stock  other  than 
the  fact  that  the  stock  is  a  good  investment.  After  the  certificates  have  been 
delivered  to  the  employe,  he  may  dispose  of  them  as  he  sees  fit. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  management  believes  that  the  men  should  have  a  certain  share  of  the 
profits  if  they  help  to  produce  them. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  is  believed  that  the  plan  is  beneficial,  but  there  is  no  way  of  knowing 
exactly  what  the  results  have  been. 


56 


Employes*  Incentive  Plans 


Cleveland  Stock  Sales  Plans 


57 


IH 


I 


THE  OHIO  BELL  TELEPHONE  COMPANY 

E.  9th  and  Huron  Rd. 
KTTMZ^L^^f''''^^^  Operating  BeU  Telephone  service. 

NUMBER  OP  PEOPLE  EMPLOYED:       3,000. 
PLAN  WAS  ESTABLISHED  IN:  1916. 

ELIGIBILITY  TO  PARTICIPATE: 

All  employes,  who  have  served  one  year,  are  eUgible  to  participate. 

EXTENT  OF  PARTICIPATION: 

Not  stated. 

CONDITIONS  AND  TERMS  OF  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES: 

-wt^!!f  ^i®  employes  are  permitted  to  purchase  one  share  of  the  common 
stock  of  the  company  for  each  $300.00  or  fraction  thereof  of  their  annual 
wages  or  salary.  The  stock  is  purchased  for  their  account  at  the  current 
market  price. 

«..f^f^"'^"V?J  *^^  ^^""^^  '^  ™^^^  ^*  *^^  ^^*^  ***  ^3.00  per  month,  $1.50  semi- 
S  Ui^^em^'lo  e      ^^'  installments  are  deducted  f roin  the  wages 

.r.r.1^7.  dividends  declared  on  the  stock  daring  the  period  of  payment  are 
applied  to  the  unpaid  balance.  f  .^        "  «  « 

Interest  at  the  rate  of  6%  is  charged  on  the  unpaid  balance. 

In  case  of  sickness,  death  or  layoff,  the  agreement  may  be  cancelled  in 
which  case,  the  employe,  or  his  family,  receives  the  amount  which  he  has 
paid  or  payments  may  be  continued  or  suspended  for  a  certain  period  at 
the  discretion  of  the  company.  ^ 

INDUCEMENTS   OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN   HIS   STOCK: 

1  .  T^®  employe  receives  the  certificates  when  the  payments  have  been  com- 
pleted.    He  may  dispose  of,  or  keep  them  as  an  invstment  at  his  own  dis- 

CF6  vlOIl* 

REASONS   GIVEN  FOR   THE  INSTALLATION   OF  THE  PLAN: 

Employes  are  given  the  opportunity  to  purchase  stock  in  order  to  increase 
their  interest  in  the  success  of  the  company.  Aui-rease 

RESULTS   REPORTED  BY  THE  EMPLOYER: 

The  plan  has  not  resulted  in  any  decrease  in  the  labor  turnover,  but  it 
itrem^'lres  ""P'***''®^  ^^«  relations  existing  between  the  company  and 

(Firms  having  similar  plans:     The  Electric  Controller  &  Mf?    Co  •  The 
Ohio  Body  &  Blower  Co.;  The  Hydraulic  Steel  Co.)  ^'        * 

CLEVELAND  WORSTED  MILLS  COMPANY 

5932  Broadway 


PRINCIPAL  BUSINESS :  Manufacture  of  woolen  and  worsted  cloth. 

NUMBER  OF  PEOPLE  EMPLOYED:       5,000. 
PLAN  WAS  ESTABLISHED  IN :  1905.  . 

ELIGIBILITY  TO  PARTICIPATE: 

Participants  must  have  had  one  year  of  service  with  the  company. 

EXTENT  OP  PARTICIPATION: 

!•«, Jo!/^""^"  ^^^  employes,  who  have  bought  stock  by  this  method,  is  quite 
large  and  is  steadily  increasing.  '       H"**^ 


CONDITIONS  AND  TERMS  OF  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

The  stock  is  sold  to  employes  at  par.  Its  actual  value  is  considerably 
above  par.  At  least  5%  of  the  value  of  the  stock  must  be  paid  at  the  time 
of  purchase.  The  employe's  note,  bearing  interest  at  5%,  is  taken  for  the 
balance. 

The  only  restriction  on  the  amount  of  stock,  which  an  employe  may  own, 
ig  his  ability  to  pay  for  it. 

The  dividends  are  paid  directly  to  the  employe.  He  is  expected  to  re- 
duce the  note  regularly  by  an  amount  at  least  equal  to  the  dividends. 

INDUCEMENTS  AND  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS  STOCK: 

The  par  value  of  the  stock  is  $100.00.  If  an  employe  wishes  to  sell  his 
stock  within  three  years  after  the  date  of  purchase,  he  must  sell  to  the  com- 
pany at  $105.00  per  share.  After  this  time,  there  are  no  restrictions  on  the 
disposition  of  the  stock. 

REASONS   GIVEN   FOR   THE  INSTALLATION  OF  THE  PLAN: 

The  company  wished  to  awaken  the  interest  of  the  employes  in  the  suc- 
cess of  the  company  and  to  develop  a  spirit  of  co-operation  among  them. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  is  thought  that  the  plan  is  developing  a  spirit  of  loyalty  among  the 
employes. 

(Firm  having  similar  plan:     The  Eclipse  Electrotype  &  Engraving  Co.) 


THE  NATIONAL  ACME  COMPANY 

East  13  1st  and  Coit  Boad 


PRINCIPAL   BUSINESS: 

NUMBER  OF  PEOPLE  EMPLOYED: 
PLAN  WAS  ESTABLISHED  IN: 


Manufacture  of  machine  tools  and  screw  ma- 
chine products. 
3500. 
1908. 


ELIGIBILITY  TO  PARTICIPATE: 

Eligibility  to  participate  is  limited  at  the  discretion  of  the  management. 

EXTENT  OF  PARTICIPATION: 

In  general,  it  is  the  older  and  more  valuable  employes,  who  are  permitted 
to  participate  in  the  plan. 

At  present,  upwards  of  10%  of  the  total  number  of  employes  participate. 

CONDITIONS    AND    TERMS    OF   PAYMENT    ON    WHICH    THE    STOCK    IS    SOLD    TO    EM- 
PLOYES : 

The  company  purchases  its  stock  on  the  open  market  and  sells  it  to  cer- 
tian  employes,  on  a  partial  payment  plan,  at  approximately  purchase  price. 

The  terms  of  the  agreement  of  sale  vary  with  each  individual  employe. 
The  general  principle  is  that  a  certain  proportion  of  the  value  of  the  stock 
is  paid  at  the  time  of  sale  and  the  balance  is  paid  in  installments. 

The  employe  does  not  receive  the  stock  certificates  until  the  stock  is 
entirely  paid. 

The  number  of  shares  of  stock,  which  an  employe  may  purchase,  is  limited 
at  the  discretion  of  the  management. 


58 


Employes*  Incentive  Plana 


Cleveland  Stock  Sales  Plans 


59 


INDUCEMENTS  OB  REQUIREMENTS  FOB  THE  EMPLOYE  TO  RETAIN  HIS  STOCK: 

^  There  are  no  conditions  surrounding  the  ownership  of  the  stock.  After 
It  ha«  been  completely  purchased,  the  employe  may  dispose  of  it  as  he  sees 
fit.  However,  the  stock  pays  a  good  rate  of  dividends,  and  the  company  tries 
to  show  the  employe  that  it  is  to  his  advantage  to  retain  the  stock  as  an 
investment. 

REASONS   GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

It  is  intended  to  reward  valuable  employes,  thereby  inducing  a  spirt  of 
co-operation  in  them  and  holding  them  to  the  company. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  held  the  men  who  have  participated.     It  has  aroused  their 
interest  in  the  welfare  of  the  company  and  has  secured  their  co-operation. 

(Firms   having    similar    plans:      The    Cleveland    Fruit    Juice    Co.:    The 
Hotel  Statler  Co.) 

THE  PENTON  PUBLISHING  COMPANY 


12th  and  Chestnut 


PRINCIPAL   BUSINESS: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED: 


Publication  of  magazines. 

200. 

1917. 


ELIGIBILITY  TO  PARTICIPATE: 

Employes,  who  have  been  in  the  service  of  the  company  for  two  years  or 
more,  are  eligible  to  participate. 

EXTENT  OF  PARTICIPATION: 

The  number  of  employes  owning  stock  is  steadily  increasing. 
Approximately  36%   of  the  employes  own  375   shares  of  the  preferred 
stoek.  *^ 

CONDITIONS  AND  TERMS  OF  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

The  board  of  directors  of  the  company  has  set  aside  2000  shares  of 
second  preferred  guaranteed  8%  stock,  par  value  $100.00,  for  sale  to  em- 
ployes. 

Eligible  employes  may  purchase  annuaUy  an  amount  of  this  stock  equal 
in  value  to  10%  of  their  salary  in  accordance  with  the  following  schedule: 
an  employe  whose  income  is  not  more  than  $1500.00  per  year— 1  share 
;;  *;         *'       **     $1500.00  to      2500.00    «*     ^    —2  shares 

;         "       "       2500.00  to       3500.00    "     '*    —3  shares 
"  *'         "       *'       3500.00  to      4500.00    '*     "    —4  shares 

and  a  similar  relation  holds  for  those  earning  more  than  $4500.00  per  year. 
The  stock  is  purchased  in  ten  equal  monthly  payments. 
It  is  guaranteed  a  dividend  of  8%,  payable  quarterly. 
Interest  at  the  rate  of  6%  is  charged  on  the  unpaid  balance. 
The  stock  certificates  are  turned  over  to  the  employe  when  payment  has 
been  completed. 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN   HIS   STOCK: 

The  stock  is  non-transferable,  but  it  can  be  surrendered  at  any  time  to 
the  Superior  Savings  and  Trust  Company,  transfer  agents,  where  a  fund  is 
maintained  for  the  purpose  of  taking  up  such  stock.  This  fund  is  equal  to  at 
least  10%,  of  the  value  of  the  outstanding  stock.  Surrender  of  the  stock  does 
not  affect  the  standing  of  the  employe  with  the  company. 

If,  at  the  close  of  the  fiscal  year,  the  common  stockholders  have  received 
a  dividend  in  excess  of  8%,  the  holders  of  second  preferred  stock  receive 
the  same  dividend  in  excess  of  8%. 


it 


REASONS  GIVEN   FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  company  desires  to  promote  length  of  service  and  a  spirit  of  co- 
operation among  the  employes. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  is  useful  in  holding  those  employes  who  take  advantage  of  it, 
and  in  increasing  their  interest  in  the  general  success  of  the  business.  As 
these  are  the  more  valuable  employes,  a  good  nucleus  is  formed  around  which 
the  organization  is  built. 

THE  RUSS  MANUFACTURING  COMPANY 

5700  Walworth  Ave. 


PRINCIPAL  BUSINESS: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


Soda  fountain,  cafeteria  equipment. 

190. 

1915. 


ELIGIBILITY  TO  PARTICIPATE: 

All  employes,  who  have  been  in  the  service  of  the  company  for  one  year 
or  more,  are  eligible  to  participate. 

EXTENT  OF  PARTICIPATION: 

Approximately  60%  of  the  employes  own  stock. 

CONDITIONS  AND  TERMS  OF  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

Employes,  having  one  year  of  service,  may  subscribe  for  five  shares  of 
common  stock,  at  par.  The  stock  may  be  paid  for  in  installments,  which  are 
deducted  from  the  employe's  wages,  at  the  rate  of  $1.00  per  week. 

Employes,  who  have  been  in  the  service  for  two  years,  may  subscribe  for 
ten  shares,  which  may  be  purchased  at  the  rate  of  $2.00  per  week. 

Employes,  who  have  been  in  the  service  for  three  years  or  more,  may  sub- 
scribe for  twenty  shares,  which  may  be  purchased  at  the  rate  of  $4.00  per  week. 

The  par  value  of  the  stock  is  $100.00. 

A  10%  dividend  on  the  stock  is  guaranteed  to  the  employe  for  a  period 
of  five  years.    The  dividends  are  applied  to  the  payment  of  the  stock. 

The  agreement,  between  the  company  and  the  employe,  is  in  the  form  of 
a  contract. 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS   STOCK: 

There  are  no  inducements  other  than  the  guarantee  of  dividends. 

When  the  cash  payments  and  dividends  reach  an  amount  equal  to  the 
purchase  price  of  the  stock,  the  certificates  are  issued  to  the  employe  who 
may  hold  or  sell  them  as  he  sees  fit. 

In  case  the  employe  leaves  the  service  or  is  discharged,  the  amount  paid 
by  him  is  refunded  together  with  accrued  dividends. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  company  wished  to  create  a  spirit  of  loyalty  and  co-operation  among 
the  employes. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

There  has  been  a  decided  betterment  of  conditions,  increased  loyalty,  co- 
operation and  more  regular  attendance. 


60 


Employet*  Incentive  Plans 


Cleveland  Stock  Sales  Plans 


ei 


THE  STANDARD  PARTS  COMPANY 

Standard  Parts  Building 


FULLER  AND  SMITH 

Guardian  Bldo. 


PRINCIPAL  business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


Manufacture  of  automobile  parts. 
2322.  ^ 

1918. 


ILIGIBILITT  TO  PARTICIPATE: 

ment^^S^'^plfprl?  T'.*- ''^^*^  ^"P^"^".  "P***^   **»«  judgment  of  the  manage- 
ment.    In  general,  participation  is  confined  to  salaried  employes. 

EXTENT  OP  PARTICIPATION: 

stock^ETrpC'^^    ''  ^"^  '^**^  "^^^  ''  -P^^^-  ^-e  P-c^ased 

^""""EMPrOYir  '^^^  °''  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 

'^ftf^r^i""^^^  Who  are  permitted  to  purchase  stock  undei   this  plan    si^n  a 
Stock  Agreement"  setting  forth  the  conditions  and  terms  of^Ie'  ^ 

nf  fZ  "^""P^y  pureliases,  on  the  open  market,  a  sufficient  number  of  shares 
of  the  common  stock  of  the  company  to  fill  the  subscription 

chase?'exc^nt  ILfM  *'  «"t)scribers  at  the  average  price  of  the  shares  pur- 
chased  except  that  the  price  cannot  exceed  $75.00  per  share.  A  payment  of 
$7  50  per  share  is  made  by  the  employe  when  the  agreement  is  sS  and  a 
note  bearing  interest  at  6%  is  executed  for  the  balance  ^  * 

no*.J^®  fu^^*"  certificates  are  then  issued  and  deposited  with  a  bank  desi^r- 
nated  in  the  agreement,  as  collateral  for  the  note.  "  ^^"  »  ^a^**  <iesig- 

^  1^^  5°*®  ^®  payable  in  installments  at  the  rate  of  $3.00  per  share  ner 
S  d^ired  '"'°''  '*'''  '''^^  '*^**  ^*^P"^^*^^  ^  '"^^  agreement  ^ml/be  ma^e 
Ufa  «?^lf"P^'*^®  receives  all  cash  dividends  which  are  declared  during  the 
^tntl  lonatf;:r '^^  ^°'  ^'^'^^^^^^  ^"*  «^^^  <^-^-^«  -:  heiraf  ad! 

In  ca^se  the  employe  leaves  the  company,  the  agreement  is  void  THp 
amount  which  the  employe  has  paid  on  the  stock  is  refunded  to  hiT 

If  the  employe  fails  to  carry  out  the  agreement,  the  company  mav  finri 
a  successor,  who  is  satisfactory  to  the  bank,  to  take  over  the  agreemeT 

compi;tfd  TZT.    '"""'*  "^  ""'^'^^^  ^"^^P*  "^*^  *^«  <^-"--t  o^  the 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS   STOCK' 

sees  fit***'''  *^^  ^"^^""^^  ^^^  ^^^  ^""^  ^^  ^^""'^^  ^^  "^ay  dispose  of  it  *as  he 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

«^  I*  ^a%  thought  that  the  plan  would  be  a  means  of  developing  the  co- 
operation  of  the  employes  with  the  management.  <^«veioping  tne  co- 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  improved  the  morale  of  the  organization. 
draulifs'^l'S^r  ''^''''  ^'""'^      '''''  ^^'^«  Worthington  Co.;    The  Hy- 


PRINCIPAL   BUSINESS: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN  WAS  ESTABLISHED  IN: 


Advertising. 

80. 

1916. 


ELIGIBILITY  TO  PARTICIPATE: 

The  determination  of  the  employes  who  may  purchase  stock  under  this 
plan,  rests  with  the  board  of  directors  of  the  company. 

EXTENT  OF  PARTICIPATION: 

The  amount  of  stock,  which  an  employe  may  purchase,  is  limited  at  the 
discretion  of  the  board  of  directors. 

Approximately  25%  of  the  employes  own  stock. 

CONDITIONS  AND  TERMS  OF  PAYMENT  ON  WHICH  THE  STOCK  IS  SOLD  TO 
EMPLOYES : 

The  employe  pays  10%  of  the  value  of  the  stock  at  the  time  of  purchase, 
and  gives  his  note,  bearing  interest  at  6%,  in  payment  for  the  balance.  The 
stock  is  issued  to  the  employe  but  is  held  as  collateral  for  the  note. 

The  stock  is  sold  at  its  book  value. 

The  dividends,  as  they  are  paid,  are  returned  to  the  corporation  to  be 
credited  to  the  payment  of  the  interest  and  principal  of  the  note. 

When  the  stock  has  been  completely  purchased,  it  is  turned  over  to  the 
employe. 

INDUCEMENTS  OR  REQUIREMENTS  FOR  THE  EMPLOYE  TO  RETAIN  HIS  STOCK: 

When  an  employe  leaves  the  service  of  the  company,  he  must  sell  hia 
stock  to  the  company  at  its  book  value,  plus  10%,  provided  the  directors 
exercise  their  option. 

REASONS  GIVEN  FOR  INSTALLATION  OP  THE  PLAN: 

It  is  intended  to  reward  employes  of  ability,  who  have  been  faithful  to 
the  interests  of  the  firm,  by  permitting  them  to  become  stockholders. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  been  instrumental  in  holding  valuable  employes  and  it  has 
stimulated  their  interest  in  the  welfare  of  the  company.  It  is  difficult  to  de- 
termine the  results  of  the  plan  as  the  employes  who  participate  represent  a 
very  high  type  who  would  naturally  give  their  best  efforts  to  the  company. 


SUMMARY  OF  STOCK  SALES  PLANS 

The  following  table  shows,  for  the  various  stock  sales  plans,  the  type  of 
business  in  which  they  are  in  use,  the  date  of  installation,  and  the  number 
employed  by  each  company: 


Number 

Plan  No. 

Type  of  BvMuess 

Date  Installed 

Employed 

1 

Manufacturer 

1905 

5,000 

2 

Public  Utility 

1916 

3,000 

3 

Professional  Service 

1916 

80 

4 

Manufacturer 

1906 

3,500 

5 

Manufacturer 

1918 

2,322 

6 

Manufacturer 

1917 

200 

7 

Manufacturer 

1903 

30,000 

8 

Manufacturer 

1915 

190 

9 

Manufacturer 

1912 

2,500 

Employes*  Incentive  Plans 


Cleveland  Stock  Sales  Plans 


63 


10  Manufacturer 

11  Manufacturer 

12  Manufacturer 

13  Manufacturer 

14  Manufacturer 
16  Semi-public  utility 
19  Manufacturer 

The  majority  of  the  plans  are  in  operation  in  manufacturing  establish- 
ments. 6              «. 


1906 

400 

1920 

600 

1920 

500 

1909 

70 

1920 

107 

1919 

675 

1920 

130 

Type  of  Business 

Professional  service 
Semi-public  utility 
Public  utility 
Manufacturer 


NumJfer  of  Plans 

1 

1 

1 

13 


The  data  show  that  the  majority  of  the  plans  were  installed  subsequent 
to  1916:  ^  Mr  M 


Date  Installed 

Number  of  Plans 

Date  Installed 

Number 

of  Plans 

1920 

4 

1915 

1 

1919 

1 

1913-1915 

0 

1918 

1 

1910-1913 

1 

1917 

1 

1905-1910 

4 

1916 

2 

1900-1905 

1 

ELIGIBILITY: 

In  many  plans,  employes  are  not  eligible  to  participate  until  after  a  cer- 
tarn  period  of  service,  varying  from  two  years  to  six  months.  In  seven  in- 
stances, the  company  decides  who  are  eUgible.  In  three  instances,  all  em- 
ployes  are  eligible. 

EXTENT  OF  PARTICIPATION: 

The  following  table  shows  the  percentage  of  the  employes  who  participate 
together  with  the  number  of  plans  for  each  percentage.  ' 

Extent  of  Participation 

Percentage  of  Total  Number  of 

Number  Employed  Plans 

1-  10%  4 

11-  20%  1 

21-  40%  3 

41-  60%  2 

61-  80%  1 

81-100%  *                        0 

It  is  true  of  three  of  the  four  plans,  in  which  less  than  10%  of  the  em- 
ployes participate,  that  the  stock  is  closely  held  and  is  offered  to  responsible 
employes  only  as  a  reward  for  faithful  or  valuable  service. 

conditions    and   terms   of   PAYMENT: 

(1)  Purchase  Price: 

In  eight  instances,  the  employes  purchase  the  stock  at  its  par  value.  In 
most  cases,  this  represents  a  considerable  inducement,  as  the  stock  normally 
sells  above  par.  In  three  cases,  the  stock  is  sold  at  the  market  price.  By  two 
companies,  the  stock  is  sold  to  employes  at  its  book  value.  In  both  cases,  the 
stock  IS  closely  held.  In  two  plans,  the  purchase  price  is  determined  in  ad- 
vance for  the  ensuing  year  by  the  company.  The  price  is  influenced  by  the 
market  value  of  the  stock.  In  two  other  instances,  the  purchase  price  of  the 
stock  IS  determined  at  the  time  the  agreement  of  sale  is  made. 


(2)  Amount  paid  at  the  time  of  purchase: 

The  majority  of  the  plans  do  not  provide  that  a  payment  shall  be  made 
at  the  time  of  purchase,  except  at  the  option  of  the  purchaser.  In  seven 
cases,  however,  it  is  stipulated  that  a  certain  percentage  shall  be  paid  at  the 
time  the  agreement  of  sale  is  made.  In  one  instance,  this  is  5%  of  the  pur- 
chase price;  in  another  case,  it  is  6%  and  in  three  instances,  it  is  10%.  In 
one  instance,  it  is  set  at  $7.50  per  share,  which  corresponds  roughly  to  10% 
of  the  purchase  price.  One  firm  provides  that  a  percentage  of  the  value  of 
the  stock  shall  be  paid  at  the  time  the  purchase  is  made,  the  amount  being 
determined  for  each  individual  case. 

(3)  Interest  charged  on  unpaid  balances: 

The  interest  charged  on  unpaid  balances  is  usually  6%.  In  three  cases 
it  is  5%;  in  six  cases  no  interest  is  charged.  However,  where  the  company 
does  not  charge  interest  on  unpaid  balances,  the  employe  usually  does  not 
receive  dividends  until  the  stock  purchase  is  completed. 

(4)  Amount  of  stock  which  an  employe  may  own: 

The  majority  of  plans  limit  the  number  of  shares  the  employe  may  pur- 
chase by  the  discretion  of  the  management.  In  three  cases,  the  number  of 
shares,  which  an  employe  may  buy,  corresponds  to  the  size  of  his  salary.  In 
one  of  them,  the  employe  may  purchase  one  share  for  each  $300.00  of  his 
annual  salary;  in  two  others,  he  is  limited  to  a  number  of  shares  equivalent 
to  10%  of  his  salary ;  in  one  plan,  the  amount  of  stock  which  the  employe  may 
purchase  is  based  on  his  period  of  service  as  follows:  if  employed  from  one 
to  two  years,  he  may  purchase  five  shares  of  common  stock;  from  two  to  three 
years,  ten  shares;  three  or  more  years,  20  shares. 

(5)  Dividends: 

In  five  instances,  the  dividends  are  paid  to  the  employe.  In  general, 
when  the  dividends  are  paid  to  the  employe,  he  must  pay  interest  on  the  un- 
paid balance  due  on  his  stock.  In  seven  cases,  the  dividends  due  are  applied 
to  the  unpaid  balance.  In-  two  instances,  stock  dividends  are  held  by  the  com- 
pany, as  collateral  for  the  note  representing  the  unpaid  balance  and  as  guaran- 
tee of  the  fulfillment  of  the  contract  of  sale,  respectively.  In  the  latter  case, 
the  stock  dividend  is  held  for  five  years,  regardless  of  whether  the  stock 
subscription  is  paid  within  this  time.  In  two  plans,  the  employe  does  not 
receive  dividends  on  the  stock  until  it  is  completely  paid,  but  he  receives 
interest  at  6%  on  his  payments. 

(6)  Bate  of  payment: 

A  certain  periodic  rate  of  payment  is  usually  specified.  Two  plans  pro- 
vide for  a  rate  of  $3.00  per  month,  per  share.  In  three  instances,  it  is  re- 
quired that  the  payments  be  made  in  ten  equal  monthly  installments.  One 
plan  stipulates  that  the  rate  shall  be  not  less  than  $2.00  per  share  per  month, 
and  no  payment  shall  be  equal  to  more  than  25%  of  one  month  *s  salary. 
One  plan  requires  that  at  least  10%  of  the  value  of  the  stock  shall  be  paid  per 
year. 

Two  plans  do  not  provide  for  any  periodic  rate  of  payment,  but  do  pro- 
vide that  payment  must  be  completed  within  a  certain  period  of  time.  In 
one  instance,  this  time  is  stated  as  two  years,  and  in  another  as  one  hundred 

weeks.  .  .    . 

In  two  cases,  payments  are  made  out  of  the  dividends  received  or  it  is 
required  that  they  be  made  at  a  rate,  at  least  equal  to  the  dividend  rate. 

In  a  few  plans,  the  rate  of  payment  is  either  left  to  the  discretion  of  the 
purchaser,  or  determined  for  each  individual  case  at  the  time  of  sale. 

4 

(7)  Conditions  of  payment: 

Four  plans  provide  that  the  employe  shall  not  receive  his  stock  cer- 
tificates until  they  are  completely  paid.     In  three  other  instances,  an  interest 


I'-' 


64 


Employes*  Incentive  Plan* 


^ri^LT^.  '^^r  ^'^'i,*^*'  "?Pf^^  ^^'^^^^  ^"«  «°  *»»«  sto'-k,  and  the  stock 
^?  «fi?^    *'^  ^^^*i  \'  collateral  for  the  note.     In  many  cases,  the  conditions 

(8)  Cancellatton : 

^i^.J*'®  "*****  common  cause  for  the  cancellation  of  an  agreement  of  sale  is 
i??,^^?f  or  resignation.  In  some  cases,  the  amounts  paid  on  the  stock  are 
rinnnf  ^'^^  '""^^'^^^  ^*  ?  "^^*^°  stipulated  rate,  and  in  other  cases  the 
H^?r.'  P*!5  if' ^  refunded  together  with  the  proportionate  share  of  ^y 
dividends  which  may  have  been  declared  and  are  payable.  Two  plans  vtI 
L'rfJ;  L  if  T^Tf°*  ""{  «^^«  '"ay  be  cancelled  at  the  request  of  the  sub- 
Trnvf/i^ Ti,?  h;8  ^^ailure  to  resume  employment  when  requested.  One  plan 
hirJh!  *.•  '  /*'  ^";P^°^^  ^^''^  ^  ^*"y  *>^*  *^«  agreement,  the  comp^any 
^f  p!i^lnJfT/^*/*°'^^'?°^  ^*-  ^"  ^"^  *^^'  *»»«  agreement  is  cancellJd  if 
fhs.f  ZJ?inl^*    *■'  ^°I  ^"^  payment  for  thirty  days.     Two  plans  provide 

^  uS    Se        °^  '^'''''*'^'  °'''^*  ^^"  ^^"^^  ^^^'^^  ^'^  *^^  company  at  a 

(9)  Character  or  Mnd  of  stock: 

ficf  ^L?r'L'°r*^''®'/.T"'^''  ^"^^  '*'  ^^^  ^  ^^  employes,  except  one  where 
8%  preferred  stock  of  the  company  is  sold.  In  this  insta^Jce,  life  stock  par- 
ticipates in  any  dividends  above  8%  on  the  common  stock  at  the  same  rate. 

INDUCEMENTS   OR   REQUIREMENTS    TO   RETAIN    STOCK: 

w..f h°«i\\  ""^J^"*!  ""{  <^»'8«s,  no  inducements  are  offered  other  than  the 
Whf«  /if  investment  In  one  case,  employes  wishing  to  sell  their  stock 
ISJ^,Tof  /  ^**'°  ^T""^  ^i  ^'"'^  ^^^  purchase,  must  sell  to  the  company  at  a 
stipulated  figure  above  the  purchase  price.  Another  company  provides  that 
the  stock  shall  be  non-transferable,  but  that  it  may  be  surrendered  to  the 
l^J'liZ  ^^Tlt  ^*  '!\  purchase  price  at  any  time.  A  fund  equal  to  10%  of 
the  value  of  the  outstanding  stock  is  maintained  to  take  it  up.     One  concern 

at'^t's  b^ok  v*^ur    ^^^^  "^^"^  "^^^  ^  ^^'  °'''^*  ""^^"^  '*  ^^^  ^  *^®  company 

f«.  o^T  /^™P^"^1«  «^7  a  special  bonus  to  employes  who  retain  their  stock 
for  a  certain  number  of  years  and  fulfill  certain  employment  conditions.  In 
one  instance,  the  employe  receives  a  bonus  of  $5.00  per  share  for  each  year  he 
reiains  his  ^tock  up  to  five  years.  Another  company  has  the  same  clause  in 
Its  plan  except  that  the  bonus  is  $2.00  per  share  per  year.  In  the  first  in- 
stwice,  forfeited  bonuses  form  a  fund  which  draws  interest  at  5%.     At  the 

mLtg^'thelrXS/"""''  *"  '""'  ''  '"'*"'"*^^  """"«  the  Subscribe™ 

REASONS   GIVEN   FOR   THE   INSTALLATION   OF   THE  PLAN: 

Many  reasons  have  been  given  for  the  installation  of  these  plans.  In 
nine  cases,  they  are  intended  to  awaken  the  interest  and  cooperation  of  the 
employes.  In  four  cases,  they  are  used  to  reward  faithful  or  valuable  service- 
four  other  mstanees,  to  promote  length  of  service.  Two  firms  installed  their 
plans  because  they  felt  that  those  employes,  who  helped  to  produce  their  profits, 
should  have  a  share  in  them.  ^  * 

RESULTS  REPORTED:  » 

In  seven  instances,  it  is  reported  that  the  plans  assisted  in  developing 
a  spint  of  loyalty  and  co-operation.  Four  plans  have  been  the  means  of  holdini 
valuable  employes.  One  plan  has  resulted  chiefly  in  more  regular  attendance. 
One  firm  is  unable  to  state  the  results  obtained. 


1/ 


CLEVELAND  BONUS  PLANS 

TYPES 

1.  Brown  Hoisting  Machinery  Company 

2.  The  Cleveland  Metal  Products  Company 

3.  The  Electric  Controller  &  Manufacturing  Company 

4.  The  Lakewood  Engineering  Company 

5.  The  Sherwin-Williams  Company 

6.  The  Stone  Shoe  Company 

7.  The  Warner  &  Swasey  Company 

8.  The  Widlar  Company 

9.  Nicola,  Stone  &  Myers 

SUMMAEY 


I: 


\ 


Cleveland  Bonus  Plans 


67 


BROWN  HOISTING  MACHINERY  COMPANY 

4403  St.  Clair  Avenue 


PRINCIPAL    business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN   WAS   ESTABLISHED   IN: 


Manufacture  of  hoisting  maehinery. 

1100. 

1916— amended  1920. 


ELIGIBILITY  AND  EXTENT  OF  PARTICIPATION: 

Employes  who  are  on  an  hourly  basis  in  the  tool  room,  machine  shop, 
paint  shop,  carpenter  shop,  pattern  shop  and  the  receiving  and  shipping  rooms, 
are  eligible  to  participate.  Approximately  82%  of  the  total  number  of  em- 
ployes, exclusive  of  salesmen,  actually  participate.     About  90%  are  eligible. 

DETERMINATION   OF  FUNDS   AND   INDIVIDUAL   SHARES: 

Eligible  employes,  who  have  worked  the  full  number  of  hours  for  a  given 
pay  period,  less  not  to  exceed  one  hour,  receive  a  bonus  of  10%  of  their 
wages  for  the  period,  exclusive  of  payment  for  overtime. 

PAYMENT  OF  THE  INDIVIDUAL   SHARE: 

The  employe's  bonus  is  paid  in  cash  at  the  end  of  each  pay  period. 

FORFEITURE : 

An  employe,  leaving  the  service,  forfeits  his  bonus  for  that  pay  period- 
Failing  to  work  the  full  number  of  hours  for  the  pay  period,  less  one, 
he  forfeits  his  bonus.  However,  employes  can  accumulate  a  reserve  credit  of 
one  hour  for  each  pay  period  in  which  they  have  worked  the  full  number  of 
hours,  and  one-half  hour  in  case  they  have  completed  the  full  number  of 
hours  less  not  more  than  one-half  hour.  Accumulated  reserves  may  be  used 
to  cancel  future  delinquencies  hour  for  hour.  In  case  they  exceed  the  reserve, 
the  excess  is  not  deducted  from  future  reserve  hours. 

Field  work  does  not  affect  an  employe's  attendance  record.  ' 

ADMINISTRATION  OF  THE  PLAN: 

The  settlement  of  all  questions,  in  connection  with  the  plan,  rests  with 
the  management. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  company  desires  to  share  any  saving  which  can  be  obtained  by 
greater  regularity  of  attendance  on  the  part  of  the  employes. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  has  been  of  assistance  in  reducing  the  amount  of  tardiness  and  ab- 


sence. 


(Firm  having  similar  plan:  The  Printz-Biederman  Co.) 


THE  CLEVELAND  METAL  PRODUCTS  COMPANY 

7609  Platt  Avenue 


PRINCIPAL   BUSINESS: 

NUMBER  OF  PEOPLE  EMPLOYED; 
PLAN   WAS    ESTABLISHED   IN: 


Manufacture  of  oil  stoves,  kitchen  utensils, 

enamel  ware,  etc. 
3300. 
1918. 


ELIGIBILITY  AND  EXTENT  OF   PARTICIPATION: 

All  superintendents,  foremen  and  assistant  foremen  may  participate  in 
the  plan  after  they  have  proved  their  worth  to  the  company's  satisfaction. 
These  employes  represent  about  3%%  of  the  total  number  of  people  em- 
ployed. 


68 


Employes*  Incentive  Plans 


'■,;: 


DETERMINATION   OP  THE  INDIVIDUAL  BONUS: 

The  bonus  is  based  upon  the  work  done  by  the  department  head  in  secur- 
ing the  maximum  efficiency.  The  important  items  of  departmental  expense 
and  management  are  listed,  and  it  is  required  that  each  department  head  ap- 
proach this  standard  which  is  arbitrarily  placed  at  100%. 

He  is  graded  on  a  special  basis,  which  is  adapted  to  the  different  details 
of  his  department's  work. 

The  items  on  which  he  is  graded,  are  grouped  under  the  general  head- 
ings of  Production,  Labor,  Organization  and  General  Efficiency.  Following 
is  a  partial  list  of  these  items: 

(a)  Production, 

1.  Output  of  department 

2.  Quality  of  output 

3.  Scrap 

4.  Equipment   conditions 

5.  Care  of  stock 

(b)  Labor, 

1.  Productive  labor 

2.  Non-productive  labor 

3.  Overtime  labor 

4.  Labor  turnover 

5.  Lates  and  absentees 

(e)    Health, 

1.  Accidents 

2.  Welfare 

(d)  Organization, 

1.  Eesponsibility 

2.  Organization  of  department 

3.  Discipline 

4.  Order  and  cleanliness 

5.  Cooperation 

6.  Foreman's  Club 

(e)  General  Efficiency 

1.  Thrift 

2.  Suggestions 

3.  Accuracy 

trnder  these  headings  there  are  more  detailed  sub-items.  Each  item  is 
weighted  with  a  maximum  number  of  points  which  can  be  allowed  for  it. 
The  total  which  the  employe  can  make  for  all  items  equals  1,000  points. 

A  committee  of  three  men  from  the  factory  manager's  office  grade  each 
man  as  follows:  Each  committeeman  makes  a  weekly  trip  through  the  shop 
unaccompanied,  and  grades  each  item  for  each  department  head.  The  com- 
nuttee  meets  monthly,  compares  notes  and  assigns  grades.  A  report  of  these 
grades  is  placed  before  the  factory  board  for  approval.  After  approval  a 
written  statement  of  the  results  of  his  month's  work  is  given  to  each  de- 
partment head. 

On  the  basis  of  this  grade,  he  receives  a  bonus,  which  is  credited  to  a 
special  savings  account.  From  month  to  month  additions,  as  earned  by  him, 
are  credited  to  this  account. 

Superintendents  and  foremen  who  receive  a  grade  of  100%,  are  given  a 
bonus  equal  to  20%  of  their  salary.  If  they  recevie  a  grade  of  90%,  they  are 
given  a  bonus  equal  to  18%  of  their  salary,  etc 

Assistant  foremen  who  receive  a  grade  of  100%,  are  given  a  bonus  equal 
to  10%  of  their  wages.  If  their  grade  is  907©,  they  receive  a  bonus  of 
9%  of  their  salary,  etc. 


Cleveland  Bonus  Plans 


69 


PAYMENT  OF  THE  BONUS: 

At  the  end  of  the  year,  each  participant  receives  a  pass  book  for  the 
accumulated  bonus  and  interest  in  his  special  savings  account.  To  date,  the 
bonus  of  the  superintendents  and  foremen  has  averaged  about  18%  of  their 
wages,  and  for  the  assistant  foremen  about  9%  of  their  wages. 

The  cost  to  the  company  is  less  than  1%  of  the  total  payroll. 

POBFEITURE : 

There  are  no  conditions  of  forfeiture.  If  an  employe  leaves  the  service 
of  the  company  he  receives  the  bonus  that  he  has  earned. 

ADMINISTRATION  OP  THE  PLAN: 

All  of  the  details  of  grading  the  participants  are  handled  by  the  com- 
mittee of  three  men  appointed  from  the  factory  manager's  office.  However, 
any  participant  who  objects  to  a  low  grading  may  make  a  complaint  to  the 
(Jeneral  Superintendent  or  the  Factory  Manager.  All  complaints  are  im- 
mediately investigated,  and  adjustments  made  if  warranted. 

SEASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  plan  was  devised  for  the  purpose  of  increasing  the  efficiency  of  the 
plant  in  general. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  done  much  to  increase  efficiency  of  the  new  men.  The  older 
foremen  formerly  received  an  arbitrary  bonus  based  largely  upon  length  of 
service.  The  new  plan  which  is  based  solely  upon  efficiency  has  not  been  re- 
ceived with  equal  favor  by  all  of  them. 

(Firm  having  similar  plan:  The  American  Fork  &  Hoe  Co.) 


THE  ELECTRIC  CONTROLLER  &  MANUFACTURING 

COMPANY 

2700  East  79th  Street 


PRINCIPAL   BUSINESS: 


number  of  PEOPLE  EMPLOYED: 
PLAN   WAS    ESTABLISHED   IN: 


The  manufacture  of  automatic  controllers 
for  direct  and  alternating  current  mo- 
tors, crane  controllers  and  lifting  mag- 
nets. 

600. 

1915. 


ELIGIBILITY  AND  EXTENT  OF  PARTICIPATION: 

Every  one  employed  for  three  months  prior  to  December  15th  is  eligible 
to  participate  in  the  plan,  provided  he  is  still  in  the  employ  of  the  company 
on  December  31st. 

At  present,  approximately  90%  of  the  total  number  of  employes  par- 
ticipate. 

DETERMINATION    OP   FUNDS    AND   THE   INDIVIDUAL   BONUS: 

The  size  of  the  individual  bonus  depends  upon  length  of  service  as  fol- 
lows: Employes  who  have  been  in  the  service  of  the  company  prior  to  De- 
cember 15  for  a  period  of 

(1)  Three  months  to  one  year,  receive  a  bonus  of  3%  of  their  wages  or 
salary  received  during  the  bonus  period; 

(2)  One  to  five  years,  a  bonus  of  5%; 

(3)  Five  to  ten  years,  7%; 

(4)  More  than  ten  years,  8%. 


n 


Mmplotfes*  Incentive  Plana 


'm 


PAYMENTS   or   THE   BONUS: 

The  employe  receives  his  bonus  in  cash  on  New  Year's  eve. 

FORPEITUKE: 

An  employe  leaving  the  service  before  the  end  of  the  bonus  period  for- 
feits his  bonus. 

Time  in  the  Army  or  Navy  of  the  United  States  or  time  lost  by  temporary 
layoff  IS  included  when  computing  the  employe's  bonus. 

ABMINISTBATION  OF  THE  BONUS: 

The  administration  of  the  plan  rests  solely  with  the  management. 

The  company  revises  the  plan  yearly  and  the  revised  plan  is  in  force  for 
the  ensuing  year. 

SEASONS  GIVEN  TOR  THE  INSTALLATION  OF  THE  PLAN: 

The  plan  was  intended  to  promote  length  of  service. 

BESULTS   REPORTED  BY  THE  EMPLOYER: 

The  plan  has  been  successful  in  reducing  the  labor  turnover.  The  com- 
pany believes  that  it  has  also  been  helpful  in  producing  better  relations  be- 
tween the  management  and  its  employes. 

1.,     (^™8  having  similar  plans:    The  Cleveland  Provision  Co.:   The  Grant 
Motor  Co.;  The  L.  N.  Gross  Co.;  The  May  Co.;  The  Hotel  Statler  Co.) 


THE  LAKEWOOD  ENGINEERING  COMPANY 


117th  Street  and  Berea  Boad 


PEINCIPAL  BUSINESS: 


NUMBER  OF  PEOPLE  EMPLOYED: 
PLAN   WAS   ESTABLISHED   IN: 


Manufacture   of   industrial   trucks,    electric 
locomotives,  clam  shell  buckets,  etc. 

700. 

1919.      This   plan    is   the   outgrowth   of    a 
number  of  previous  plans. 

ELIGIBILITY  AND  EXTENT  OP  PARTICIPATION: 

♦1,.^'^^®'*^  f^-T  l""*!^  regarding   elegibility  to  participate.     The  employes 
themselves  decide  what  qualifications  are  necessary. 

At  present  approximately  100%  of  the  employes  participate  in  the  plan. 

DETERMINATION   OF  FUNDS    AND   INDIVIDUAL   SHARES: 

Expense  budgets  are  made  up  for  the  sales  and  production  departments 
based  on  both  the  maximum  business,  which  the  company  can  reasonably  ex- 
pect, and  the  minimum  business  with  which  it  will  be  content.  The  budeets 
are  set  by  the  management  in  consultation  with  the  heads  of  the  departments, 
and  aj-e  graduated  between  the  maxinmm  and  the  minimum.  Each  depart- 
ment IS  considered  separately  and  has  its  own  budget. 

One-third  of  any  saving  which  a  department  can  make  over  its  budeet 
goes  to  the  company,  one-third  to  the  members  of  the  department,  and  one- 
third  to  a  contmgency  fund  to  carry  the  department  along  and  insure  the 
men  tneir  jobs  m  times  of  business  depression. 

PAYMENT  OF  THE  INDIVIDUAL  SHARE: 

The  money  which  is  distributed  is  divided  chiefly  on  the  basis  of  the 
employe  s  salary.  However,  the  employes  may  change  this  basis  if  they  so 
desire* 


Cleveland  Bonus  Plans 


71 


FORFEITURE : 

There  are  no  causes  for  forfeiture  other  than  leaving  the  service.  The 
employes  have  the  right  to  make  any  conditions  of  forfeiture  which  they  see 
fit 

ADMINISTRATION  OF  THE  PLAN: 

The  administration  of  the  plan  rests  entirely  with  the  employes. 
They  can  verify  the  company's  statement  of  expenses. 
The  company  may  modify  the  plan  at  the  end  of  the  year. 

REASONfe  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  plan  is  an  effort  to  promote  and  reward  eflSciency. 

RESULTS   REPORTED  BY   THE   EMPLOYER: 

The  management  sees  greatly  increased  interest  on  the  part  of  the  em- 
ployes. In  many  cases  it  has  caused  a  reduction  in  sales  and  manufacturing 
costs. 


THE  SHERWIN-WILLIAMS  COMPANY 

601  Canal  Boad 


PRINCIPAL   business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN   WAS   ESTABLISHED   IN: 


Manufacture  of  paints  and  varnishes. 

350. 

1919. 


ELIGIBILITY  AND  EXTENT  OF  PARTICIPATION: 

AH  employes  of  a  department,  including  the  foreman,  are  eligible  to 
participate  in  the  plan.  New  employes  participate  from  date  of  hiring,  pro- 
viding they  remain  30  days,  their  dividend  being  withheld  for  that  period. 

Approximately  80%  of  the  total  number  employed  participate  in  the  plan. 
They  are  all  in  the  manufacturing  departments. 

DETERMINATION   OF   FUNDS    AND   INDIVIDUAL    SHARES: 

A  standard  cost  per  100  units  is  set  for  each  department.  This  stand- 
ard cost  is  set  from  the  average  cost  records  for  a  year  and  includes  the 
items  of  overhead  and  direct  labor  concerning  which  the  employes  are  able 
to  effect  savings.  Any  saving  which  the  employes  or  the  company  are  able 
to  make  over  this  standard  cost  during  a  given  month  forms  a  fund  which  is 
divided  equally  between  the  company  and  the  employes. 

An  itemized  report  of  the  expense  account  is  furnished  to  each  depart- 
ment at  the  end  of  the  month.  The  dividend  charge  for  the  month  is  shown 
on  the  report  but  it  is  not  one  of  the  items  entering  into  the  unit  cost. 

Those  employed  more  than  three  months  share  in  the  dividend  fund  on 
the  basis  of  their  total  wages  for  the  month. 

Those  employed  less  than  three  months,  but  more  than  one  month  share 
in  the  fund  on  the  basis  of  50%  of  their  wages. 

No  dividend  may  exceed  25%  of  the  total  wages  earned  by  a  department. 
Any  surplus  over  this  25%  limit  goes  into  a  special  surplus  account  which 
is  divided  among  eligible  employes,  at  the  end  of  the  fiscal  year,  on  the  basis 
of  their  earnings  for  the  year.  They  must  be  in  the  company's  employ  at 
the  end  of  the  year. 

PAYMENT  OP   THE  INDIVIDUAL   SHARE: 

Each  employe  receives  his  monthly  dividend  in  cash,  shortly  after  the 
end  of  the  month. 


71 


Employes*  Incentive  Plans 


Cleveland  Bonus  Plans 


73 


I 


PORPEITURE : 

Employes  who  leave  the  service  before  the  end  of  their  first  month  for- 
feit their  share  of  any  dividend  which  may  be  declared  for  the  month. 

Forfeited  shares  are  distributed  among  the  remaining  employes.  Sick- 
ness, death  or  layoflP  have  no  effect  upon  the  right  to  participate,  except  that 
insofar  as  the  employe's  earnings  are  reduced,  his  proportionate  share  would 
be  smaller. 

ADMINISTRATION  OP  THE  PLAN: 

The  employes  participating  constitute  the  *' fifty-fifty ' '  club,  whose  ob- 
ject IS  to  promote  greater  efficiency.  The  general  superintendent  of  the  fac- 
tory is  the  president  of  the  club. 

There  is  also  a  committee  composed  of  the  foreman  and  one  elected  repre- 
sentative for  each  20  workmen  of  a  department  The  general  superintendent 
presides  over  the  committee  meetings. 

The  monthly  meetings  are  held  on  the  company's  time,  following  com- 
pletion of  the  previous  month's  expense  reports.  The  monthly  dividend  checks 
are  distributed  at  these  meetings,  and  there  is  open  discussion  of  ideas  for 
increased  production  and  efficiency.  Any  recommendations  made  by  the  com- 
mittee are  forwarded  to  the  management. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OP  THE  PLAN: 

The  company  wished  to  decrease  the  labor  turnover  and  increase  the  ef- 
ficiency, interest  and  cooperation  of  the  employes  in  the  business. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

The  plan  has  accomplished  all  that  was  expected  of  it  in  the  way  of  in- 
creased co-operation  and  efficiency.  In  addition,  the  company  has  been  able 
to  obtain  many  valuable  ideas  from  the  employes  through  the  monthly  shop 
zneexings. 


THE  STONE  SHOE  COMPANY 

312  Euclid  Avenue 


PRINCIPAL   BUSINESS: 

number  op  PEOPLE  EMPLOYED: 

PLAN   WAS   ESTABLISHED   IN: 


Ketail  sale  of  shoes. 

125. 

1916. 


ELIGIBILITY  AND  EXTENT  OP  PARTICIPATION: 

Practically  100%  of  the  sales  people  operate  under  this  plan.  They  com- 
prise about  80%  of  the  total  number  of  people  employed. 

All  sales  people  are  put  on  the  plan  as  soon  as  they  join  the  organiza- 

DETERMINATION  OP  COMMISSIONS: 

Salespeople  are  given  a  drawing  account,  the  size  of  whi<?h  is  determined 
for  each  mdividual  employe.  They  receive  a  commission  of  six  per  cent,  on 
their  sales  when  their  commissions  have  exceeded  their  drawing  account. 

At  the  end  of  the  year,  employes  who  have  been  continuously  in  the 
company's  service  throughout  the  year,  receive  a  bonus  equal  to  10%  of 
their  year's  wages,  less  any  deficit  which  may  exist  between  their  commis- 
sions and  their  drawing  account. 

PAYMENT   OP   COMMISSIONS: 

The  commissions  to  the  employe's  credit  are  paid  in  cash  at  the  end  of 
^ch  SIX  months'  period.  The  employe  may  draw  on  his  commissions  during 
the  SIX  months'  period,  up  to  a  credit  balance  of  $35.00. 


FORFEITURE: 

Employes  forfeit  their  yearly  bonus  if  they  leave  the  service  before  the 
end  of  the  year. 

In  case  of  discharge,  they  may  forfeit  their  commissions  at  the  discre- 
tion of  the  management. 

ADMINISTRATION  OP  THE  PLAN: 

The  settlement  of  any  questions  regarding  commissions  rests  with  the 
management. 

REASONS  GIVEN  FOR  THE  INSTALLATION  OP  THE  PLAN: 

The  plan  was  intended  to  increase  the  efficiency  of  the  sales  force  and 
to  promote  length  of  service. 

RESULTS  REPORTED  BY  THE  EMPLOYER: 

It  has  greatly  increased  the  efficiency  of  the  salesmen. 
The  management  has  noted  an  increase  in  cooperation  on  the  part  of 
every  one  who  has  been  affected  by  the  plan. 

(Firms  having  similar  plans:     Browning,  King  &  Co.;  The  Lindner  Co.) 


THE  WARNER  AND  SWASEY  COMPANY 

5809  Carnegie  Avenue 


PRINCIPAL   business: 

number  OP  PEOPLE  EMPLOYED; 
PLAN   WAS   ESTABLISHED   IN: 


Manufacture  of  machine  tools  and  optical 

instruments. 
1300-1600. 
1916. 


ELIGIBILITY  AND  EXTENT  OP  PARTICIPATION: 

Employes,  having  six  months  of  continuous  service,  are  eligible  to  par- 
ticipate. 

At  present,  betweefi  75%  and  85%  of  the  total  number  of  employes  par- 
ticipate. 

DETERMINATION   OP   FUNDS   AND   THE   INDIVIDUAL   BONUS: 

The  bonus  which  the  employe  receives,  depends  upon  his  length  of  serv- 
ice. At  the  end  of  the  first  six  months  of  continuous  service,  he  receives  a 
bonus  of  1%  of  his  total  earnings.  At  the  end  of  each  six  months  thereafter, 
the  bonus  increases  1%  until  he  has  had  five  years'  service.  After  five  or 
more  years  of  continuous  service,  the  employe  receives  a  bonus  of  10%  of  his 
yearly  earnings. 

PAYMENT  OP  THE  BONUS: 

The  employe  receives  his  bonus  in  cash  at  the  end  of  the  year. 
The  bonus  is  not  assignable. 

FORFEITURE : 

If  the  employe  leaves  the  service,  he  forfeits  his  right  to  a  bonus. 

ADMINISTRATION  OP  THE  PLAN: 

The  administration  of  the  plan  rests  with  the  management.  The  com- 
pany may  modify  the  plan  at  the  end  of  the  ye^  if  it  so  desires. 


74 


Employes*  Incentive  Plans 


lUIlMi 


kl* 


SEASONS  GIVEN  TOR  THE  INSTALLATION  OF  THE  PLAN: 

The  plan  was  installed  in   order  to  promote  continuity  of  service  and 
to  reward  those  employes  who  have  been  faithful  to  the  company's  interests. 

RESULTS   REPORTED  BY   THE  EMPLOYER: 

It  has  caused  a  decrease  in  labor  turnover  and  has  been  instrumental  in 
maintaming  satisfactory  labor  relations. 

Ti,  *  (^if ins  having  similar  plans:     The  Cleveland  Provision  Co.:   The  Grant 
Motor  Co.i  The  L.  N.  Gross  Co.;  The  May  Co.;  The  Hotel  Statler  Co.) 


THE  WIDLAR  COMPANY 

722-740  Bolivar  Eoad 


PRINCIPAL   business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

plan   was   ESTABLISHED   IN: 


Manufacture  and  sale  of  food  products. 

235. 

1916. 


KLIQIBILITY  AND  EXTENT  OF  PARTICIPATION: 

All  factory  and  office  employes,  who  are  on  a  weekly  wage,  are  eligible 
to  participate  in  the  plan.  ^      -o  »  6 

*  *i^*  present,  approximately  75  or  80%  of  the  factory  employes  and  100% 
of  the  office  employes  participate.  "       r   j  /o 

m  v^^®  participating  employes  are  organized  into  the  "Widlar  Savings 
Oub.  Employes  may  join  the  club  at  any  time  and  receive  interest  on 
their  deposits  and  a  proportionate  amount  of  their  bonus  at  the  end  of  the 
year. 

DETERMINATION   OF   FUNDS   AND  INDIVIDUAL   SHARE: 

Employes,  who  wish  to  participate  in  the  plan,  must  deposit  at  least  5% 
of  their  weekly  wage  in  a  savings  fund. 

A  dividend  of  8%  is  paid  on  savings  up  to  $2.00  per  week  and  6%  on 
savings  over  $2.00  per  week.  ^ 

At  the  end  of  the  year,  participants  whose  savings  have  been  continuous 
throughout  the  year,  receive  a  bonus  of  one  week's  wage.  The  bonus  cannot 
exceed  $25  00  for  any  mdividual  employe.  However,  employes  earning  less 
than  $25.00  per  week,  who  save  more  than  5%  of  their  weekly  salary,  riceive 
a  yearly  bonus,  not  to  exceed  $25.00,  of  which  amount  their  average  weeklv 
savings  have  equaled  5%.  ^  ^ 

PAYMENT  OF  THE  INDIVIDUAL  SHARE: 

At  the  end  of  the  year,  the  employe  has  the  following  options: 

(1)  He  can  withdraw  the  entire  amount  to  his  credit. 

(2)  He  can  leave  any  part  of  this  amount  on  deposit  and  receive 
interest  at  8%. 

AiAA  nn^  ^®  ^^  ^"^  preferred  stock  of  the  company  at  the  par  value  of 
$100.00  per  share,  and  receive  an  extra  dividend  at  8%  at  once.  There 
are  no  restrictions  on  the  ownership  of  the  stock.  At  the  request  of  the 
employe,  the  company  will  purchase  his  stock  at  par  plus  accrued  inter- 
est at  8%.  Withdrawals  from  savings  during  the  year  do  not  bear  in- 
terest. 

Jt)RFEITURE: 

There  are  no  conditions  of  forfeiture. 

ADMINISTRATION: 

The  administration  of  the  plan  rests  with  the  management 


Cleveland  Bonus  Plans  75 

REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

The  company  is  endeavoring  to  promote  thrift  among  its  employes. 

RESULTS   REPORTED   BY   THE   EMPLOYER: 

The  participating  employes  are  enthusiastic  about  the  plan.  It  has 
helped  them  to  save  money  and  has  undoubtedly  iucreased  their  good  will  to- 
ward the  company.  It  is  reported  that  savings  have  been  made  by  people 
who  have  never  before  had  a  savings  account  of  any  kind. 

Note — For  the  salesmen  of  the  company,  there  is  a  plan  whereby  pay- 
ments of  $8.00  per  month  throughout  the  year  entitle  the  depositor  to  one 
$100.00  share  of  Widlar  preferred  stock,  on  which  an  extra  dividend  of  8% 
is  paid  at  the  time  the  stock  is  issued.  This  stock  pays  a  regular  dividend  of 
7%,  but  the  company  agrees  to  pay  an  extra  regular  dividend  of  1%  making 
a  total  return  of  8%  yearly. 

(Firms  having  similar  plans:  The  Cleveland  Electric  Illuminating  Co.; 
The  Hotel  Statler  Co.;  The  Arco  Co.) 

NICOLA,  STONE  AND  MYERS 

Swetland  Bldg. 


PRINCIPAL    business: 

NUMBER  OF  PEOPLE  EMPLOYED: 

PLAN   WAS    ESTABLISHED   IN: 


Wholesale  lumber  and  lumber  products. 

150. 

1900. 


ELIGIBILITY  TO  PARTICIPATE: 

All  employes,  with  the  exception  of  those  working  on  commissions,  are 
eligible  at  the  discretion  of  the  management. 

EXTENT  OF  PARTICIPATION: 

Not  stated. 

DETERMINATION    OF    FUNDS    AVAILABLE    FOR    DISTRIBUTION    AMONG    THE    PARTICI- 
PANTS : 

The  amount  distributed  is  determined  by  the  management  and  is  de- 
pendent on  the  size  of  the  profits.  It  varies  from  5  to  25%  of  wages  and 
salaries. 

DETERMINATION  OF   THE  INDIVIDUAL   SHARE: 

The  percentage  of  the  gross  profits  of  his  department  which  an  em- 
ploye receives  varies  with  the  responsibility  of  his  position.  This  percentage 
is  known  to  the  participant. 

The  size  of  the  individual  share  is  not  limited  by  any  fixed  percentage 

of  his  salary. 

PAYMENT  OF  THE  PROFIT  SHARE: 

Profit  shares  are  paid  annually  in  cash  without  restrictions  as  to  their 
withdrawal  or  use. 

FORFEITURE : 

The  right  to  participate  is  forfeited  when  an  employe  leaves  the  service 

of  the  company.  ... 

Sickness  has  no  effect  upon  the  right  or  extent  of  participation. 

ADMINISTRATION  OF  THE  PLAN: 

Employes  have  no  voice  in  the  administration  of  the  plan. 
They  are  not  given  a  statement  of  the  profits,  but  the  branch  managers 
know  the  amount  of  the  gross  profits  of  their  branch. 
The  company  may  modify  the  plan  at  will. 


76 


Employes*  Incentive  Plans 


Cleveland  Bonus  Plans 


77 


Ml 

I 


*1! 


ii 


REASONS  GIVEN  FOR  THE  INSTAI.LATION  OF  THE  PLAN: 

The  company  feels  that  the  employes  are  entitled  to  a  share  when  the 
earnings  justify  it. 

EESULTS   REPORTED  BY   THE  EMPLOYER: 

The  plan  has  stimulated  the  interest  and  efficiency  of  the  employes. 

(Firms  having  similar  plans:  The  American  Box  Co.;  The  P.  J.  Brown 
Construction  Co.;   The  Qeveland  Milling  Co.;   The  Cleveland  Provision  Co.) 


SUMMARY  OF  BONUS  PLANS 

The  various  bonus  plans  are  classified  as  follows: 

1.  Service  Plant, 

Designed  to  promote  length  of  service  or  attendance. 

2.  Efficiency  Plans 

Designed  to  promote  increase  in  efficiency  or  production. 

3.  Commission  Plans 

Designed  to  promote  increases  in  sales. 

4.  Thrift  Plans 

Designed  to  promote  habits  of  saving  among  employes. 

5.  Miscellaneoits  Plans 

This  table  shows  the  type  of  business  in  which  the  more  important  bonus 
plans  are  used,  date  they  were  installed,  and  the  size  of  the  company: 


Service  Plans 


Plan  No. 

1 
2 
3 

6 

7 

8 


Plan  No. 

9 
10 
11 
12 
13 


Plan  No. 
14 
15 
16 


Plan  No. 

17 

18 
19 


Type  of  Business 

Betail 

Wholesale 

Manufacturer 

Manufacturer 

Semi-public  utility 

Manufacturer 

Manufacturer 

Manufacturer 


Number  of 
Plan  Installed  in    Employes 


1920 
1916 
1914 
1918 
1919 
1916 
1916 
1915 


2,607 

1,000 

650 

500 

675 

1,450 

1,100 

600 


Efficiency  Plans 


Type  of  Business 

Manufacturer 
Manufacturer 
Manufacturer 
Manufacturer 
Manufacturer 


Plan 


Commission  Plans 


Type  of  Business 

Be  tail 

Betail 

Betail 


Plan 


Number  of 
Installed  in    Employes 

1919  250 

1917  2,000 
1919  700 
1919  353 

1918  2,500 

Number  of 
Installed  in    Employes 

1909  275 

1912  60 

1916  125 


Thrift  Plans 


Type  of  Business 

Manufacturer 
Semi-public  utility 
Public  utility 


Number  of 
Plan  Installed  in    Employes 

1916  235 

1919  675 

1904  1,200 


Miscellaneous  Plans 

Number  of 
Plan  No.  Type  of  BvMness  Plan  Installed  in    Employes 

20  Wholesale  1916  1,200 

21  Betail  1918  145 

22  Professional  service  1918  125 

23  Manufacturer  1914  125 

24  Semi-pubUc  utiUty  1919  110 

25  Professional  service  1918  50 

26  Wholesale  1900  150 

The  service  and  efficiency  plans  are  found  mainly  in  manufacturing  es- 
tablishments. The  commission  plans  reported  are  confined  to  retail  trade. 
This  table  shows  the  number  of  plans  of  each  type  which  are  in  use  in  various 
types  of  business. 

Number  of  Plans 


Type  of 
Business 

Service 
Plan 

Efficiency  Commission  Thrift 
Plan           Plan         Plan 

Misc. 
Plan 

Total 

Betail 
Wholesale 

Professional  Service 
Semi-public  Utilily 
Public  UtiUty 
Manufacturer 

1 
1 
0 
1 
0 
5 

0            a 

0               0 
0               0 
0               0 
0               0 
5               0 

0 
0 
0 
I 
1 
1 

1 
8 
2 
1 
0 
1 

5 
3 
2 
3 
1 
12 

Total 


8 


5 


3 


26 


A  great  majority  of  bonus  plans  were  installed  subsequent  to  1915.  The 
following  table  shows  the  number  of  plans  of  each  type  which  were  installed 
during  various  years. 

Number  op  Plans 


Bate 
Installed 

1920 

1919 

1918 

1917 

1916 

1915 

1913-1915 

1910-1913 

1905-1916 

1900-1905 


Service   Efficiency  Commission  Thrift 
Plan  Plan  Plan  Plan 


1 
1 
1 
0 
3 
1 
1 
0 
0 
0 


0 
8 
1 
1 
0 

a 

0 
0 
0 
0 


0 
0 
0 
0 

1 

0 
0 

1 
1 

0 


0 

1 

0 
0 

1 

0 
0 
0 
0 

1 


Misc. 
Plan 

0 
1 
8 
0 
1 
0 
1 
0 
0 
1 


Total 

1 
« 
5 
1 
6 
1 
2 
1 
1 
2 


eligibility  and  extent  of  participation: 


(a)  Service  Plan: 

Eligibility  depends  upon  a  certain  minimum  length  of  service,  ranging 
from  one  month  to  one  year.  The  majority  of  plans  require  a  minimwTn 
period  of  three  months.  In  two  cases  participation  is  confined  to  a  certain 
class  of  employes.  In  one  of  these  instances  it  is  confined  to  office  people 
and  salesmen.  In  another  instance  it  is  confined  to  employes  of  certain  de- 
partments. 

(b)  Efficiency  Plan: 

Participation  is  usually  confined  to  a  given  class  of  employes.  In  one 
case  it  is  confined  to  the  foremen  and  inspectors;  in  another,  to  those  em- 
ployes who  are  not  on  salary.  In  one  instance  superintendents,  foremen  and 
assistant  foreman  are  eligible  and  in  another,  factory  employes.  In  one  plan 
conditions  of  eligibility  are  determined  by  the  participating  employes. 


78 


Employes*  Incentive  Plans 


Cleveland  Bonus  Plans 


79 


(c)  Commission  Plans 

These  plans  are  confined  to  salespeople. 

(d)  Thnft  Plans: 

In  one  plan,  employes  on  a  weekly  wage,  are  permitted  to  participate.  In 
another,  participation  is  confined  to  employes  earning  more  than  $1,500.00 
per  year.  In  one  instance,  participation  is  entirely  at  the  discretion  of  the 
management. 

(e)  Miscellaneous  Plans: 

In  most  instances  participation  is  entirely  at  the  discretion  of  the  man- 
agement, but  in  two  cases  it  is  confined  to  a  certain  class  of  employes. 

DETEBMINATION  OF  FUNDS  AND  THE  INDIVIDUAL   SHARE: 

(a)  Service  Plans 

Seven  plans  give  a  percentage  of  the  employe's  salary  for  a  certain 
length  of  service.  This  percentage  increases  with  his  length  of  service.  The 
maximum  percentage  paid  in  three  plans  is  10%;  in  two,  8%  one  plan  pays 
754%  and  one,  5%.  In  two  plans  the  minimum  percentage  paid  is  5%.  In 
others,  it  ranges  from  5%  to  1%.  The  period  of  service  necessary  to  obtain 
the  maximum  bonus  ranges  from  six  months  to  ten  years  as  follows:  In 
one  plan  six  months'  service  is  required;  in  another,  nine  months;  in  another, 
two  years;  two  plans  require  five  years;  one  plan,  eight  years  and  another 
plan,  ten  years  of  service.  The  period  of  service  necessary  before  an  em- 
ploye is  eligible  to  receive  a  bonus  ranges  from  one  year  to  nothing.  The 
majority  of  the  plans  require  that  the  employes  have  a  minimum  of  three 
months'  service. 

(b)  Efficiency  Plans 

There  are  three  general  types  of  efficiency  plans: 

1.  Plans  in  which  increasing  percentages  of  salary  are  given  for  stated 
inereases  in  production  over  a  given  standard. 

2.  Plans  that  give  a  certain  percentage  of  salary  for  attaining  a  certain 
standard  of  efficiency.  The  following  plan  is  an  example  of  this  type.  The 
employes  are  graded  according  to  the  schedule: 


1.  Two    years'    service 

2.  Steadiness  of  service 

3.  Sobriety 

4.  Team   work 
6.  Suggestions 

6.  Loyalty 

7.  Care  of  equipment 

8.  SkiU 


— 10  pointa 
— 10  points 
— 10  points 
— 10  points 
— 10  points 
— 20  points 
— 10  points 
— 10  points 


Employes  rating  100  points  are  given  a  bonus  of  ten  per  cent,  of  their 
wages.  Employes  rating  90  points  are  given  a  bonus  of  nine  per  cent  of 
their  wages,  etc. 

3.  Plans  wherein  a  standard  expense  or  cost  budget  is  set  up  and  a 
certain  percentage  of  any  savings  which  can  be  made  on  this  standard  is 
divided  among  the  participating  employes.  In  one  plan  of  this  type,  a  stand- 
ard departmental  cost  per  100  units  is  determined.  This  includes  only  the 
direct  labor  cost  and  departmental  expense.  Fifty  per  cent,  of  any  saving 
made  over  this  standard  cost  goes  to  the  employes  and  the  remainder  to  the 
eompany.  In  these  plans,  the  funds  distributed  are  usually  prorated  among 
the  employes  on  the  basis  of  their  salary.  In  one  instance,  there  is  a  length 
of  service  clause  whereby  employes  having  from  one  to  three  months'  service, 
■hare  in  the  funds  on  the  basis  of  50%  of  their  wages;  also,  that  any  dividend 
above  25%  of  the  total  wages  shall  go  into  a  fund  which  is  divided  among 
eligible  employes  at  the  end  of  the  year. 


(c)  Commission  Plans 

In  plans  of  this  type,  a  sales  quota  is  set  for  each  salesman.  He  receives 
a  commission  on  any  sales  in  excess  of  this  quota. 

(d)  Thrift  Plans 

The  employes  usually  deposit  a  percentage  of  their  salary  with  the  com- 
pany, receiving  interest  on  deposits.  In  two  instances,  the  percentage  de- 
posited is  five  per  cent.;  one  company  deposits  to  the  employe's  credit  an 
amount  equal  to  his  deposit  but  provides  that  the  total  credits  shall  not  ex- 
ceed a  certain  percentage  of  the  company's  net  income.  Another  plan  provides 
that  the  company  at  its  discretion  will  deposit  a  certain  percentage  of  their 
salary  to  the  credit  of  employes  whose  application  is  approved.  A  certain  per- 
centage of  this  credit  goes  into  a  provident  fund.  The  employe  is  not  re- 
quired to  make  any  deposits. 

The  interest  paid  on  these  deposits  varies  from  four  to  eight  per  cent. 
One  company  pays  eight  per  cent,  on  savings  deposited  up  to  $2.00  per  week 
and  six  per  cent,  on  weekly  savings  in  excess  of  this  amount. 

(e)  Miscellaneous  Plans 

In  general,  a  certain  percentage  of  salary  is  given  to  selected  employes 
which  is  fixed  by  the  management,  and  usually  approximates  10%  of  the  em- 
ploye's pay. 

PAYMENT  OF  THE  INDIVIDUAL  SHARE: 

The  following  table  shows  in  what  form  the  bonus  is  paid,  when  paid, 
and  the  conditions  attached  to  use  or  payment  of  the  bonus: 


Plans 

1 
2 
4 
6 
6 
7 
8 
» 


Plans 

10 
11 
12 
18 
14 


Plans 

16 
17 


Service  Plans 

Mow  Paid 

When  Paid 

Conditions 

Cash 
Cash 
Cash 
Cash 
Cash 
Ca^h 
Cash 
Cash 

Yearly 

Yearly 

Monthly 

End  of  pay  period 

Yearly 

Yearly 

End  of  pay  period 

Yearly 

Efficiency  Plans 

None 
None 
None 
None 
None 
None 
None 
None 

Mow  Paid 

When  Paid 

Conditions 

Cash 
Cash 
Cash 
Cash 
Cash 

Semi-annually 
Monthly 
Yearly 
Yearly 

None 
None 
None 
None 
None 

Commission  Plans 

a 

Mow  Paid 

When  Paid 

Conditions 

Cash 
CfliSh 
Cash 

Weekly 

Yearly 

Semi-annually 

None 

None 

Can     draw     accumulated 

eommission  above  $35. 

/ 


Employes'  Incentive  Flans 


FUns 
18 


19 
20 


How  Paid 
Cash 


Thbifp  Plans 
When  Paid 
Yearly 


Gash  or  stock     End  of   7  years 
Cash  End  of  10  years 


Conditions 

Can  leave  part  in  deposit 
with  interest  at  8%,  or 
can  buy  shares  of  pre- 
ferred stock. 
May  leave  money  in  new 
thrift  class. 

May  withdraw  fund  after 
given  length  of  time  if 
employes  give  notice  of 
leaving. 


MiSCKLLAKlOUS  PLANS 


Plans 

Sow  Paid 

21 

Cash 

22 

Cash 

23 

Cash 

24 

Cash 

25 

Cash 

26 

Cash 

27 

Cash 

forfeiture: 

When  Pai 

4            Conditions 

Monthly 

None 

Yearly 

None 

Yearly 

None 

Yearly 

None 

Monthly 

None 

Yearly 

None 

Yearly 

None 

(a)  Service  Plans 

Three  plans  provide  that  employes  having  a  certain  number  of  unexcused 
absences  lose  their  bonus;  in  three  more,  excessive  tardiness  causes  forfeiture. 
In  almost  every  case,  leaving  the  service  of  the  company  results  in  forfeiture. 

(b)  Efficiency  Plans 

In  three  cases,  employes  who  leave  the  service  forfeit  their  bonus.  In 
one  instance,  such  employes  receive  it.  One  plan  leaves  the  question  of  for- 
feiture entirely  to  the  employee  In  all  instances,  failure  to  reach  the  re- 
quired standard  of  efficiency  causes  a  reduction  in  the  bonus. 

(c)  Commission  Plan 

As  a  general  rule,  there  are  no  conditions  of  forfeiture.  In  one  plan,  a 
discharged  employe  may  forfeit  his  commission  at  the  discretion  of  the  man- 
agement. This  plan  also  provides  for  a  yearly  bonus.  In  case  the  employees 
commissions  do  not  equal  his  drawing  account,  the  deficit  is  deducted  from 
his  bonua 

(d)  Thrift  Plan 

In  one  instance,  failure  to  make  deposits  regularly  causes  forfeiture  of 
the  right  to  participate.  In  another,  employes,  who  withdraw  their  deposits 
within  a  certain  length  of  time,  receive  only  the  amount  of  their  deposits, 
plus  interest  at  a  given  rate.  One  plan  provides  that  forfeiture  shall  de- 
pend on  the  discretion  of  the  management. 

(e)  Miscellaneous  Plans 

In  plans  of  this  nature,  forfeiture  usually  rests  with  the  discretion  of  the 
management.  In  one  instance,  it  is  provided  that  employes  absent  without 
permission  more  than  a  given  number  of  times  forfeit  their  bonus. 

ADMINISTRATION : 

Most  of  the  bonus  plans  provide  that  the  management  may  modify  or 
alter  them  at  its  discretion. 

In  five  instances,  the  employes  have  a  voice  in  the  administration  of  the 
plan.  In  four  instances,  they  express  themselves  through  the  medium  of  a 
■hop  committee;  in  another,  through  a  board  of  trustees,  on  which  they  have 


Cleveland  Bonus  Plans 


81 


representatives.  In  two  cases,  the  administration  of  the  plan  rests  with  a 
committee  or  a  board  of  trustees,  appointed  by  the  company.  In  one  of  these 
plans,  employes  may  appeal  to  the  superintendent  if  they  can  claim  unfair 
treatment. 


REASONS  GIVEN  FOR  THE  INSTALLATION  OF  THE  PLAN: 

(a)  Service  Plans 

The  purpose  of  eight  plans  is  to  promote  length  of  service,  and  in  two 
more,  regular  attendance.  One  company  wishes  to  share  with  employes 
savings  due  to  more  regular  attendance. 

(b)  Efficiency  Plans         •  • 

The  purpose  of  this  type  is  to  increase  production  and  efficiency.  One 
employer  uses  such  a  plan  to  decrease  his  turnover,  and  another,  to  develop 
a  spirit  of  co-operation. 

(c)  Commission  Plans 

In  addition  to  increasing  sales,  the  object  of  one  plan  is  to  stimulate 
loyalty  among  employes.  Additional  objects  of  other  plans  are  to  increase 
the  earning  power  of  the  employes  and  to  promote  length  of  service. 

(d)  Thrift  Plans 

Companies  having  these  plans  believe  that  by  promoting  thrift  they 
will  produce  a  moYe  satisfactory  type  of  employe.  One  plan  aims  to  reduce 
labor  turnover. 

(e)  Miscellaneoiis  Plans 

There  are  various  objects  of  these  plans.  Two  plans  are  used  as  a  means 
of  rewarding  faithful  service.  Another  is  intended  to  increase  employes' 
loyalty,  and  two  others  to  hold  valuable  employes. 

RESULTS  REPORTED: 

(a)  Service  Plans 

Five  employers  report  that  their  plans  have  decreased  their  turnover 
or  reduced  the  amount  of  tardiness.  Two  plans  have  had  no  appreciable 
results. 

(b)  Efficiency  Plans 

Four  plans  have  been  instrumental  in  increasing  general  efficiency  or 
production.  Two  companies  report  increased  co-operation  and  interest  of  the 
employes.  Two  plans  have  resulted  in  the  reduction  of  costs  and  have  been 
helpful  in  bringing  out  valuable  ideas  of  the  employes.  One  plan  has  caused 
dissatisfaction  among  the  older  employes. 

(c)  Commission  Plans 

These  plans  have  generally  resulted  in  an  increase  in  the  volume  of  sales 
and  a  reduction  in  the  sales  cost.  Also,  one  plan  has  resulted  in  increased 
employes*  co-operation  and  another  has  been  instrumental  in  retaining  em- 
ployes. 

(d)  Thrift  Plan 

One  firm  states  that  the  plan  has  greatly  increased  the  good  will  of  the 
employes  toward  the  company.  For  other  such  plans,  it  is  felt  that  they  have 
benefited  the  employes  and  the  company,  although  the  results  are  somewhat 
indefinite. 

(e)  Miscellaneous  Plans 

Four  plans  are  reported  unsatisfactory.  Two  others  have  held  valuable 
men  and  have  produced  co-operation  and  loyalty.  One  plan  has  been  instru- 
mental in  holding  employes. 


DISCONTINUED  INCENTIVE  PLANS 


II 


(iu4  ;AfliBiiii'J 


Discontinued  Incentive  Plans 


85 


DISCONTINUED  INCENTIVE  PLANS 

The  survey  of  Cleveland  incentive  plans  included  a  study  of  those  plans 
which,  for  various  reasons,  have  been  discontinued.  A  summary  is  given  here- 
with. 

Profit  Sharing  Plans 

discontinued  plan  no.  1 

The  amount  distributed  was  not  really  a  predetermined  percentage  of 
the  profits.  Employes  preferred  an  increase  in  wages,  believing  that  the 
management  had  a  tendency  to  consider  the  profit  share  as  part  of  the 
wages.     As  a  result  the  plan  was  discontinued. 

DISCONTINUED    PLAN    NO.    2 

One-half  of  each  dividend  was  paid  to  employes  as  a  profit  share.  Em- 
ployes were  dissatisfied  with  the  amoimt  so  paid  as  they  did  not  under- 
stand the  factors  affecting  profits. 

DISCONTINUED    PLAN   NO.    3 

A  certain  percentage  of  the  profits  was  annually  distributed  to  employes 
in  proportion  to  their  wages.  It  was  found  that  yearly  payments  did  not 
sustain  the  interest  of  the  employes. 

DISCONTINUED    PLAN    NO.    4 

The  amount  distributed  was  not  in  reality  a  predetermined  percentage  of 
the  profits.  Although  provision  was  made  for  employe  representation  in 
connection  with  this  plan,  the  plan  was  abandoned  because  it  did  not  seeur© 
increased  cooperation  of  employes. 

Limited  Profit  Sharing 
discontinued  plan  no.  5 

Profit  shares  were  distributed  in  proportion  to  wages,  but  the  amount 
distributed,  when  profits  were  small,  was  insufficient  to  satisfy  employes. 

DISCONTINUED    PLAN    NO.    6 

Profits  above  a  given  amount  were  equally  divided  with  certain  employes 
quarterly.  It  was  found  that  quarterly  distributions  were  not  sufficiently 
frequent  to  sustain  employes'  interest. 

Stock  Sales  Plans 
No  discontinued  plans  were  found.    Two  of  the  firms,  which  discontinued 
profit  sharing,  have  stock  sales  plans  for  employes. 

Bonus  Plans 

discontinued  plan  no.  7 

Bonus  was  paid  for  increased  production,  but  failed  to  accomplish  de- 
sired results. 

discontinued  plan  no.  8 

Bonus  was  paid  for  production,  but  the  plan  created  dissatisfaction  when 
the  size  of  the  bonus  decreased  with  decreased  volume  of  business. 

discontinued  plan  no.  9 

Employes  were  paid  a  yearly  bonus  equal  to  five  per  cent,  of  their 
wages.  They  preferred  a  corresponding  wage  increase  and  the  plan  was 
dropped.    The  employer  is  now  installing  a  stock  sales  plan. 

discontinued  plan  no.  10 

Bonus  was  paid  for  regular  attendance,  but  was  discontinued  because 
employes  preferred  a  straight  wage  to  the  bonus. 


/ 


w 


A  CLASSIFIED  LIST  OF  CLEVELAND  FIRMS  HAVING 

PROFIT  SHARING,  LIMITED  PROFIT  SHARING, 

STOCK  SALES  OR  BONUS  PLANS 


Profit 


The  Astrup  Co. 

The  Browning  Company 


The  Cleveland  Twist  Drill  Co. 
The  H.  C.  Christy  Co. 
The  W.  S.  Tyler  Co. 

The  Underwood  Typewriter  Co. 

(Branch  Office) 
The  West  Steel  Casting  Co. 

The  Willys-Overland  Co. 
(Branch  Office) 


Sharing  Plans 

Manufacture  awnings,  tents  and  awning 

hardware  * 
Manufacture  locomotive  cranes  and  grab 

buckets  * 
Manufacture  twist  drills  and  reamers  * 
Distributor  of  food  products 
Manufacture  wire  cloth,  ornamental  iron 

and  bronze  work  * 
Typewriter  sales  * 


Manufacture     cast     steel     motor 

wheels,  small  steel  castings 
Manufacture  automobiles  * 


truck 


Limited  Profit  Sharing  Plans 


The  Austin  Co. 

The  Best  Foundry  Co. 

The  Chandler  &  Price  Co. 

The  Cleveland  Welding  Manufac- 

ing  Co. 
The  Cleveland  Window  Glass  Co. 
The  Clawson  &  Wilson  Co. 
The  CJleveland  Tractor  Co. 
The  Dangler  Stove  Co. 
The  Dill  Manufacturing  Co. 
The  Enamel  Products  Co. 


The  Federal  Knitting  Mills  Co. 

The  L.  N.  Gross  Co. 
The  Halle  Bros.  Co. 
The  Hydraulic  Pressed  Steel  Co. 

The  Kaynee  Co. 

The  B.  L.  Marble  Chair  Co. 
The  Marshall  Drug  Store 
The  National  Woolen  Co. 
Potter  Teare  &  Co. 
The  Eeliable  Stove  Co. 


Engineering  and  building  construction 
Foundry  products 
Manufacture  printing  machinery 
Manufacture    steel    equipment   for    solid 

and  pneumatic  tires 
Manufacture  interior  woodwork 
Wholesale  dry  goods 
Manufacture  of  tank  type  tractors  * 
Manufacture  stoves 
Manufacture  metal   stampings 
Manufacture  porcelain  enameled  tops  for 

tables  and  cabinets,  enameled  stove 

parts,  etc. 
Manufacture   fancy  knit   goods,   hockey 

caps  and  sweaters 
Manufacture  ladies'  waists 
Department  store 
Manufacture  auto  frames,  parts,  wheels, 

rims,  steel  barrels,  etc.  * 
Manufacture     boy's     blouses,      youth's 

shirts,  children 's  mackinaws  * 
Manufacture  office  chairs  * 
Chain  of  Drug  Stores  * 
Eework  wool  * 
Lumber 
Manufacture  stoves  * 


Stock  Sales  Plans 


The  American  Steel  &  Wire  Co. 
The  Cleveland  Fruit  Juice  Co. 

The  Cleveland  Hardware  C!o. 


Manufacture  steel  products* 
Manufacture  prepared  fruits   and   fruit 

syrups 
Vehicle  hardware  and  f orgings  * 


•  See  Index. 


88 


Employes*  Incentive  Platis 


Firms  Hewing  Group  Incentive  Plans 


80 


The  Ohio  Bell  Telephone  Co. 

The  Cleveland  Welding  &  Mfg.  Co. 

The  Cleveland  Worsted  Mills  Co. 
The  Dunham  Co. 

The  Eclipse  Electrotype  &  Engrav- 
ing Co. 
The  Eljria  Iron  &  Steel  Co. 
The  FuUer  &  Smith  Co. 
The  Globe  Machine  &  Stamping  Co. 

The  Home  Tea  Company 

The  Hydraulic  Pressed  Steel  Co. 

The  Lincoln  Electric  Co. 
The  Mechanical  Eubber  Co. 

The  National  Acme  Co. 

The  Ohio  Blower  Co. 

The  Pittsburgh  Coal  Co. 
The  Penton  Publishing  Co. 
The  Euss  Manufacturing  Co. 

The  Standard  Drug  Co. 

The  Standard  Tire  Co. 

Hotel  Statler  Co. 

The  Standard  Parts  Co. 

The  Star  Baking  Company 

Swift  &  Co. 

The  Templar  Motors  Corporation 

The  United  States  Gypsum  Co. 

The  Geo.  Worthington  Co. 


Operating  Bell  telephone  service  in  Cuya- 
hoga County  * 
Manufacture    steel    equipment   for    solid 

and  pneumatic  tires 
Manufacture  cloth  and  yarn  * 
Manufacture      agricultural      implements 

and  automobile  castings 
Art     work,     photographing,     engraving, 

electrotypes 
Manufacture  steel  tubing 
Advertising 

Manufacture  automobile  tool  boxes,  mo- 
tion film  reels,  dies,  stampings,  etc. 
Distributor  of  teas,  coffees,  spices 
Manufacture  pressed  steel  stampings,  au- 
tomobile frames,  etc. 
Manufacture  electric  meters 
Manufacture  canvas  belting  and  rubber 

goods 
Manufacture    Acme    and    Gridley    screw 

machines  and  their  products  * 
Manufacture    auto     bodies,     ventilators, 

steam  specialties 
Handling  coal  from  cars  to  vessels 
Publishing  and  printing  *  ; 
Manufacture  soda  fountain  and  factory 

cafeteria  equipment  * 
Eetail  drugs 

Manufacture  automobile  tires 
Hotel  service 

Manufacture  automobile  parts* 
Bake  bread  and  cake 
Distributor  of  meats,  etc. 
Manufacture  automobiles 
Manufacture  plaster,  plaster  board  and 

fireproofing  materials 
Jobbers  of  hardware 


The  American  Box  Co. 

The  American  Construction  Co. 

The  American  Fork  &  Hoe  Co. 
The  B.  E.  Baker  Co. 
The  Bentley  Bros.  Co. 
The  Brandt  Co. 

The  P.  J.  Brown  Construction  Co. 
The  Buehler  Brothers  Co. 
Browning  King  &  Co. 
C.  O.  Bartlett  &  Snow  Co. 

The  Cleveland  Metal  Products  Co. 

The  Cleveland  Steel  Barrel  Co. 

The  Childs  Co. 

The  Cleveland  Provision  Co. 


Bonus  Plans 

Manufacture  wooden  boxes 

Build  docks,  piers,  breakwaters,  fac- 
tories, etc. 

Manufacture  forks,  hoes  and  rakes 

Eetail  store   (men's  and  boys'  clothing) 

Manufacture  gray  iron  castings 

Hotel  restaurant  and  wholesale  food  sup- 
ply 

Construction  of  blast  furnaces 

Chain  cut  rate  meat  markets 

Male  wearing  apparel 

Manufacture  conveying  machinery  and 
general  machinery  lines 

Manufacture  oil  stoves,  aluminum  and 
enamel  cooking  utensils 

Manufacture  steel  barrels 

Eestaurant 

Distributors  of  pork,  veal,  mutton  and 
provisions 


Chandler  Motor  Car  Co. 
The  Canfield  Oil  Co. 

The  Cleveland  Electric  Hluminating 

Co. 
The  Cleveland  Akron  Bag  Co. 
The  Cleveland  Milling  Co. 
B.  Dreher  Sons  Co. 
The  Electric  Controller  &  Mfg.  Co. 

The  Ford  Motor  Co. 

The  Forest  City  Machine  &  Forge 

Co. 
The  Gillsy  Hotel  Co. 
The  L.  N.  Gross  Company. 
The  Grant  Motor  Car  Corporation 
The  Higbee  Co. 

The  Hunkin-Conkey  Construction  Co. 
The  Lindner  Co. 
The  Lakewood  Engineering  Co. 
The  Land  Title  Abstract  Co. 
The  B.  L.  Marble  Chair  Co. 
The  M.  &  M.  Go. 
The  May  Co. 
John  Meckes  Son  &  Co. 
The  Mutual  Fihn  Co. 
The  Martin-Barriss  Co. 
The  Nicola,  Stone  &  Myers  Co. 
Otis  &  Co. 
J.  B.  Pearce  Co. 
Sherwin-Williams  Co. 
The  W.  W.  Sly  Manufacturing  Co. 
Hotel  Statler  Co. 
The  Steel  Products  Co. 

The  Stranahan  Bros.  Co. 

The  Saginaw  Bay  Co. 

The  Stone  Shoe  Co. 

The  Standard  Sanitary  Mfg.  Co. 

The  Union  Paper  &  Twine  Co. 

The  Widlar  Co. 

The  Wovenright  Knitting  Co. 

The  Warner  &  Swasey  Co. 

The  Zettelmeyer  Coal  Co. 

•  See  Index. 


Manufacture  automobiles 

Gasoline,    auto    oils    and    all    petroleum 

products 
Light  and  power 

Manufacture  bags 
Distributor  flour  and  feed 
Manufacture  pianos  and  organs 
Manufacture   electric  control   apparatus, 
electric  brakes,  lifting  magnets,  etc* 
Manufacture  automobiles 
Manufacture  differentials  for  autoa 

Hotel  service 

Manufacture  ladies'  waists 

Manufacture  automobiles 

Department  store 

General  contractors 

Eetailer 

Manufacture  industrial  trucks  * 

Mortgages,  etc. 

Manufacture  office  chairs  * 

Manufacture  automobile  accessories 

Department  store 

Department  store 

Moving  picture  film  exchange 

Lumber  sales 

Wholesale  lumber 

Investment  bankers 

Manufacture  wall  paper 

Manufacture  paints  and  varnishes* 

Foundry  equipment 

Hotel  service 

Manufacture  poppet  valves,  bolts,  screws, 
etc. 

Baking,  candy,  restaurant  with  cafe- 
teria 

Planing  mill 

Eetail  shoes  * 

Plumbing  and  heating  supplies 

Wholesale  paper  and  twine 

Coffee,  tea,  spice,  extracts,  etc.* 

Manufacture  men's  and  ladies'  hosiery 

Manufacture  machine  tools  and  optical 
instruments  * 

Wholesale  and  retail  coal 


*  See  Index. 


f4 

II* 


90 


Employes*  Incentive  Plans 

BIBLIOGRAPHY 


Bibliography 


91 


Abbott,  L. 


American  Academy  of  Political 

Science,  Annals 
American  Economic  Association. 

The 
Basset,  W.  B. 

British  Board  of  Trade 


Burkhead,  P.  L. 

Burritt,  Bennison,  Gay,  Heilman 

and  Kendall 
Calkins,  Mary  Whiton 
Cleveland  Chamber  of  Commerce 

Crawther,  S. 

Emmet,  Boris 

Endicott,  H.  B. 

Famham,  D.  T. 
Fisher,  B. 
Oilman,  N.  P. 


Holman,  G.  E. 
Laub,  D.  Kenneth 

National  Civic  Federation,  The 
New  York  Times 
Parsons,  G.  BL 
Perkins,  Geo.  W. 

Pfahler,  A.  E. 


Price,  L.  L. 
Purvis,  Alexander 


Popular  fallacies:  that  workingmen 
ought  not  to  share  the  profits,  be- 
cause they  do  not  share  the  losses. 
June,  1919. 

Harmonizing  Labor  and  Capital  by 
Means  of  Industrial  Profit  Sharing. 

The  Adjustment  of  Wages  to  Efficiency. 
1896. 

The  Other  Side  of  Profit  Sharing.— 5y«- 
tem,  August,  1919. 

Eeport  on  Profit  Sharing  and  Labour 
Co-partnership  in  the  United  King- 
dom. 

Fallacy  of  the  Employees '  Profit  Sharing 
as  a  Reward  for  Labor. — Ind.  Mgt., 
July,  1919. 

Profit  Sharing. 

Sharing  the  Profits.     1888. 

Industrial   Profit   Sharing   and   Welfare 

Work.     1916. 
Wages    and    Profit    Sharing    Delusions. 

—World's  Work,  Oct.,  1919. 
Profit   Sharing  in  the  United   States.— 

Bulletin    of    the    U.   8.   Bureau    of 

Labor  Statistics. 
Labor  as  Seen  by  an  Employer  Who  Has 

no   Strikes. — N.   Y.   Times,   Oct   5, 

1919. 
Some  Experiences  With  Profit  Sharing. 

—Ind.  Mgt.,  March,  1917. 
Where  Profit  Sharing  Fails  and  Where 

it   Succeeds. — System,   March,    1916. 
Profit    Sharing   Between   Employer    and 

Employee. 
A  Study  in  the  Evolution  of  the  Wages 

System.     1889. 
Profit  Sharing — Acceptability  and  Possi- 
bilities. 
An  Investigation  of  Ford  Profit  Sharing. 

Detroit    Evening    News,    Nov.     24, 

1914. 
Profit  Sharing  by  American  Employers. 

1916. 
Profit  Sharing  vs.   Bonus  System.     Oc- 
tober 5,  1919. 
A  Fair  Basis  of  Profit  Sharing.     Ind. 

Mgt.,  Feb.,  1918. 
Profit    Sharing    or    the    Worker's    Fair 

Share.    Address  before  the  National 

Civic  Federation,  Sept.  11,  1919. 
Profit  Sharing  as  an  Influence  in  Indus- 
trial     Relations.        Annals      Amer. 

Acad.  Pol.  and  Soc.  Sc.    May,  1916. 
Co-operation  and  Co-partnership,     1914. 
Harmonizing    Labor     and     Capital     by 

Means    of    Industrial     Partnership. 

Vol.  XX.    The  Annals,  Amer.  Acad. 

Pol.  and  Soc.  Sc.    1902. 


Rawson,  H.  G. 
Schiflf,  Mortimer  L. 

Schloss,  D.  F. 

TarbeU,  L  M. 

Williams,  Aneurin 
Wing,  Geo.  Clary 
Bibliography 


Profit  Sharing  Precedents.     1891. 
Profit    Sharing.      Reprinted    from    The 

New  York  Times,  Oct.  5,  1919. 
Methods     of     Industrial    Remuneration. 

1892. 
Experiments     in     Justice.       Am.     Mg., 

March  15. 
Co-partnership  and  Profit  Sharing. 
Applied  Profit  Sharing. 
Profit  Sharing  in  the  United  States  by 

Boris  Enmiet. 


92 


Employes*  Incentive  Plana 


INDEX. 


Administration  of 

Profit  Sharing  Plans   34 

Limited  Profit  Sharing  Plans 49 

Bonus  Plans 80 

Aluminum  Manufactures,  Inc.  (Individual  Incentive  Plan)   ....../......  9 

American  Steel  &  Wire  Co.,  The  (Stock  Sales  Plan) 53 

Astrup  Co.,  The  (Profit  Sharing  Plan)   [ 29 

Bibliography 9O 

Bonus  Plans .65-81 

Brown  Hoisting  Machinery  Co 67 

Cleveland  Metal  Products  Co ]  67 

Electric  Controller  &  Manufacturing  Co. 69 

Lakewood  Engineering  Co 70 

Sherwin-Williams  Co 71 

Stone  Shoe  Co * 71 

Warner  &  Swasey  Co 73 

Widlar  Co [ .' .  74 

Nicola,  Stone  &  Myers 75 

Summary ] 75 

Bonus  Plans,  Classification  of,  76 

Bonus  Plans,  Classified  List  of  Firms  Having, 86 

Bonus  Plans,  Definition  of, 4 

Brown  Hoisting  Machinery  Co.  (Bonus  Plan) .,  67 

Browning  Co.,  The  (Profit  Sharing  Plan)   ','. 25 

Classified  List  of  Firms  Having  Profit  Sharing,  Limited  Profit  Sharing, 

Stock  Sales  and  Bonus  Plans 86 

Cleveland  Hardware  Co.,  The  (Stock  Sales  Plan) , . .  54 

Cleveland  Metal  Products  Cb.,  The  (Bonus  Plan)   67 

Cleveland  Tractor  Co.,  (Limited  Profit  Sharing  Plan)   .*  ] 38 

Cleveland  Twist  Drill,  The  (Profit  Sharing  Plan)   28 

Cleveland  Worsted  Mills  Co.,  The  (Stock  Sales  Plan)   56 

Columbia  Axle  Co.,  The  (Individual  Incentive  Plan)    10 

Definitions 4 

Individual  Incentives;   Profit  Sharing;   Limited  Profit  Sharing; 
Bonus  Plans;  Stock  Sales  Plans. 

Discontinued  Incentive  Plans  83-85 

Distribution,  Determination  of  Funds. 
Available  for. 

Profit  Sharing  Plans   32 

Limited  Profit  Sharing  Plans 47 

Bonus  Plans   , .  78 

Earnings,   Guarantee  of, 20 

Electric  Controller  &  Manufacturing  Co.,  The  (Bonus  Plan)   69 

Eligibility  to  Participate 

Profit  Sharing  Plans 32 

Limited  Profit  Sharing  Plans 46 

Bonus  Plans   77 

Extent  of  Participation 

Profit  Sharing  Plans 32 

Limited  Profit  Sharing  Plans 46 

Bonus  Plans   77 


Index 


93 


Forfeiture 

Profit  Sharing  Plans 34 

Limited  Profit  Sharing  Plans 49 

Bonus  Plans   80 

Fuller  &  Smith  (Stock  Sales  Plan)   61 

Funds  Available  for  Distribution,  Determination  of. 

Profit  Sharing  Plans    32 

Limited  Profit  Sharing  Plans   47 

Bonus  Plans  78 

Group  Incentives,  Definitions  and  Classifications  4 

Hydraulic  Steel  Co.,  The  (Limited  Profit  Sharing  Plan)  39 

Incentive  Plans,  Objects  of 4 

Individual  Incentive  Plans 7-21 

Aluminum  Manufactures,  Inc 9 

Columbia  Axle  Co 10 

Printz-Biederman  Co 12 

Wellman-Seaver-Morgan  Co 14 

White  Sewing  Machine  Co 15 

Van  Dorn  Iron  Works  Co 17 

Summary   19 

Individual  Incentives,  Principles  Governing   21 

Individual  Incentives,  Definitions  of 4 

Individual  Shares,  Determination  of, 

Profit  Sharing  Plans   33 

Limited  Profit  Sharing  Plans  48 

Bonus  Plans  78 

Kaynee  Co.,  The  (Limited  Profit  Sharing  Plan)   40 

Lakewood  Engineering  Co.  (Bonus  Plan)   70 

Limited  Profit  Sharing  Plans 35-50 

Cleveland  Tractor  Co 38 

Hydraulic  Steel  Co 39 

Kaynee   Co 40 

B.  L.  Marble  Co 41 

Marshall  Drug  Co 42 

National  Woolen  Co 43 

Reliable  Stove  Co 44 

Summary   45 

Limited  Profit  Sharing,  Definition  of 4 

Limited  Profit  Sharing  Plans,  Classified  List  of  Firms  Having 86 

B.  L.  Marble  Co.,  The  (Limited  Profit  Sharing  Plan)   41 

Marshall  Drug  Co.,  The  (Limited  Profit  Sharing  Plan)   42 

National  Acme  Co.,  The  (Stock  Sales  Plan)   57 

National  Woolen  Co.  (Limited  Profit  Sharing  Plan)    43 

Nicola,  Stone  &  Myers  (Bonus  Plan)   75 

Objects  of  Incentive  Plans 4 

Ohio  Bell  Telephone  Co.  (Stock  Sales  Plan)    56 

Participation,  Extent  of 

Profit  Sharing  Plans   32 

Limited  Profit  Sharing  Plans   •  • 46 

Bonus  Plans   77 

Payment  in  Proportion  to  Production,  Wage   19 


94 


Employes'  Incentive  Plans 


Index 


95 


Payment  of  Individual  Shares 

Profit  Sharing:  Plans    33 

Limited  Profit  Sharing  Plans   ..,,...........[.,..'...'.  48 

Bonus  Plans !!].]!!!  79 

Penton  Publishing  Co.,  The  (Stock  Sales  Plan)   58 

Principles  Governing  Individual  Incentives   21 

Principles  of  Incentive  Plans 3 

Printz-Biederman  Co.,  The   (Individual  Incentive  Pisin)    ....'.'.'.'...'.'.'.'.  12 

Production   Standards    ' 19 

Profit  Sharing  Plans,  Classified  List  of  Firms  Having  ................  86 

Profit  Sharing  Plans   •  • 23-34 

Browning  Co 25 

Underwood  Typewriter  Co , .*  ]  26 

Willys-Overland   Co ]!..*!.!.!.  27 

Cleveland  Twist  Drill  Co 28 

Astrup  Co *.  29 

W.  S.  Tyler  Co I ..[.[[..[...[ .  29 

Summary !  1 1 !  [ ! . . .  "  !  31 

Quality,  Effect  of  Individual  Incentive  Plans  on  20 

Reasons  for  Installation  of  Plans. 

Profit  Sharing  Plans   •  • 34 

Limited  Profit  Sharing  Plans 49 

Bonus  Plans   ] gj 

Reliable  Stove  Co.,  The  (Limited  Profit  Sharing  Pianj  '  .*  ] . . . . . '. . . . '. .' ."  .*  44 

Results  Reported 

Profit  Sharing  Plans   34 

Limited  Profit  Sharing  Plans  ................[.....  50 

Bonus  Plans gj 

Russ  Manufacturing  Co.,  The  (Stock  Sales  Plan)  l........... ......,[',  69 

Shares,  Size  of  Individual, 

Profit  Sharing  Plans 32 

Limited  Profit  Sharing  Plans   ..............'.'..  46 

Bonus  Plans .........,[  78 

Shares,  Determination  of  the  Individual 

Profit  Sharing  Plans   33 

Limited  Profit  Sharing  Plans 48 

Bonus  Plans  *  ] 1  *. .'  [  1 !  78 

Shares,  Payment  of  Individual. 

Profit  Sharing  Plans    •  • ,  33 

Limited  Profit  Sharing  Plans 48 

Bonus  Plans 79 

Sherwin-Williams  Co.,  The  (Bonus  Plan) 71 

Standard  Parts  Co.,  The  (Stock  Sales  Plan) .['.'.  60 

Standards,  Production   •  • [[[  jg 

Stock  Sales  Plans  51-64 

American  Steel  &  Wire  Co. 53 

Cleveland  Hardware  Co 54 

Ohio  Bell  Telephone  Co 56 

Cleveland  Worsted  Mills  Co 56 

National  Acme  Co [   [  57 

Penton   Publishing   Co *  *  ]  53 

Russ  Manufacturing  Co 59 

Standard  Parts  Co ]  qq 

Fuller  &  Smith .[ 61 

Summary  gj 

Stock  Sales  Plans,  Classified  List  of  Firms  Having 86 

Stock  Sales  Plans,  Definition  of 4 


Stone  Shoe  Co.,  The  (Bonus  Plan)   72 

Summary  of, 

Individual  Incentive  Plans  19 

Profit  Sharing  Plans   31 

Limited  Profit  Sharing  Plans 45 

Stock  Sales  Plans 61 

Bonus  Plans 76 

W.  S.  Tyler  Co.,  The  (Profit  Sharing  Plan)   30 

Underwood  Typewriter  Co.,  The  (Profit  Sharing  Plan)    26 

Van  Dorn  Iron  Works,  The  (Individual  Incentive  Plan)   17 

Wage  Payment  in  Proportion  to  Production 19 

Warner  &  Swasey  Co.,  The  (Bonus  Plan)   73 

Wellman-Seaver-Morgan  Co.,  The  (Individual  Incentive  Plan)    14 

White  Sewing  Machine  Co.,  The  (Individual  Incentive  Plan)   15 

Widlar  Co.,  The  (Bonus  Plan)    74 

Willys-Overland  Co.,  The  (Profit  Sharing  Plan) 27 


i*fc 


a;>;^  o/v^s* 


NEH 


APR  2  01994 


COLUMBIA  UNIVERSITY  LIBRARIES 

This  book  is  due  on  the  date  indicated  below,  or  at  the 
expiration  of  a  definite  period  after  the  date  of  br;x^wi„.^ 
provided  by  the  library  rules  or  by  special  arrangement  wlt^ 
the  Librarian  in  charge.  8«nienc  wiin 


OAT«  •OflROWCO 


DATE  DUE 


DATE  BORflOWSO 


T 


DATE  DUE 


C26(747;  MlOO 


M: 


mm^ 


■m^ 


COLUMBIA  UNIVERSITY  UBRARip 


0044261497 


!«««4fc»,rrr>1"'|i     I  lij-.rrw.^sr- 


.s- 


4t 


.ip^^sgraw^K^ 


»■/•...<._  .,„..., 


'"■''"   ■'•••""IMMlHIU.).    •   •  ,  "         .     -.< 


END  OF 
TITLE 


